Competition Commission issues draft guidelines on minority shareholder protections

Posted 04 December 2025 Written by Acts Online
Category Trade

Brought to you by SA Legal Academy: The Competition Commission has issued draft guidelines detailing its proposed approach to merger applications where minority shareholder protections grant a form of control.

In terms of section 79(1) of the Competition Act, No. 89 of 1998, the Commission has invited public comment on draft guidelines regarding the acquisition of minority shareholder protections. The document seeks to clarify the application of section 12 of the Act, specifically addressing circumstances where governance rights granted to minority shareholders constitute a ‘form of control’ that triggers mandatory merger notification requirements.

A notice gazetted on 11 December 2025 confirmed that the deadline for public submissions is 20 January 2026. This notice corrected a prior discrepancy regarding the closing date for comments and provided updated access to the draft text.

The draft guidelines focus on the following regulatory aspects:

  • The specific types of veto rights over strategic business decisions that the Commission considers to confer control;
  • The impact of board representation and appointment rights on the determination of control under section 12(2); and
  • The procedural requirements for notifying transactions that involve the acquisition of such protections.

Once finalised, these guidelines will not be legally binding on the Commission, the Competition Tribunal, or the Courts. However, in terms of the Competition Act, No. 89 of 1998, any person interpreting or applying section 12 of the Act will be required to take them into account.

Click here to download the Notice and Draft Guidelines.

What this means for you, your business, or your clients

  • For yourself: You must review the draft criteria for ‘control’ to ensure that your legal or compliance advice regarding transaction structuring aligns with the Commission’s proposed interpretation of section 12.
  • For your business: Your firm should audit standard investment templates and term sheets to identify whether existing minority protection clauses (such as veto rights over budgets or senior appointments) could now trigger mandatory merger filings.
  • For your clients: Clients must be advised that acquiring minority stakes with specific governance protections may necessitate a formal merger notification, incurring statutory filing fees and potential implementation delays.

Originally published at https://legalacademy.co.za/news/read/competition-law-input-sought-on-minority-protection-guidelines

The views expressed herein are those of the author and do not necessarily reflect those of Acts Online. Acts Online accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.