The M&A market showed a resilience to slowdowns elsewhere and growth compared to 2023.

Sustainability, ESG and impact have been the key drivers in the last 12 months. There has also been a significant interest in fintech and digital assets.

The industries in Mauritius that experienced significant M&A activity in 2024 include:

• financial services: this sector continues to be highly active, with numerous mergers and acquisitions, particularly in fintech and insurance;
• tourism and hospitality: the tourism sector has seen a revival, leading to increased M&A activity in hospitality and hospitality-related industries; and
• real estate and construction: there has been notable activity in the real estate and construction sectors, driven by both local and foreign investments.

The acquisition of a company in Mauritius may be achieved in the following ways:

• private negotiations involving share or asset purchase;
• amalgamations (under the Companies Act, 2001) of two companies where one survives as the amalgamated company or a new company is formed;
• amalgamation of two or more companies by order of the Supreme Court of Mauritius;
• scheme of arrangement sanctioned by the Supreme Court of Mauritius;
• stock exchange transactions and dealings in securities through normal market operations; and
• takeover offer under the Securities (Takeover) Rules, 2010 whereby the offeror acquires effective control of an offeree which is a “reporting issuer” (save for a company holding a global business licence and which is not listed on a securities exchange).

The primary regulators for M&A activity are:

• the Registrar of Companies (the “ROC”) in relation to the provisions of the Companies Act, 2001 (the “CA01”);
• the Financial Services Commission (the “FSC”) and the Stock Exchange of Mauritius (the “SEM”) in relation to the provisions of the Securities Act, 2005 (the “SA05”), the Securities (Public Offer) Rules, 2007, the Securities (Preferential Offer) Rules, 2017, the Securities (Takeover) Rules, 2010 and the Securities (Purchase of own shares) Rules, 2008. The Financial Services Act, 2007 (the “FSA07”) may also have a certain degree of bearing on an M&A transaction, specifically where special licences issued to the target company, are involved; and
• the Competition Commission (the “CCM”) as regards antitrust matters under the Competition Act, 2007.

There are no restrictions on foreign investment in Mauritius. However, where a target company holds immovable property (or interests in immovable property) in Mauritius, and where the target company is acquired by non-citizens, certain regulatory approvals must be obtained.

Similarly, disposal by a target company of its assets to a foreign national will also require certain regulatory approvals.

Business combinations in Mauritius will be subject to the antitrust regulations set out under the Competition Act, 2007. The CCM is therefore empowered to regulate, amongst other anti-competitive conduct, merger situations.

The CCM is also empowered to investigate and review merger situations, specifically where one or all parties to the merger will supply or acquire 30% or more of the market. The CCM may also investigate where it has reasonable grounds to believe that a merger situation has or is likely to result in the lessening of competition within a specific market.

In relation to a prospective merger, the CCM may order the parties to:

• desist from completion or implementation of the merger insofar as it relates to a market in Mauritius;
• divest the assets specified in the direction within the period specified in the direction, before the merger can be completed or implemented; and
• adopt, or desist from, this conduct, including conduct in relation to prices, as specified in the direction as a condition of proceeding with the merger.

On the other hand, in relation to a completed merger, the CCM may direct an enterprise to:

• divest itself of the assets specified in the direction within the period specified in the direction; and
• adopt, or desist from, the conduct, including conduct in relation to prices, as is specified in the direction as a condition of maintaining or proceeding with the merger.

Additionally, from a regional perspective, as a member state of the Common Market for Eastern and Southern Africa (COMESA), business combinations involving Mauritius and a member state will be regulated by the regulations made by the COMESA Competition Commission under the COMESA treaty.

The Workers’ Rights Act, 2019 together with the Employment Relations Act, 2008 are the main pieces of legislation governing employment matters. In the context of termination of employment in a merger or takeover, the provisions of these pieces of legislation will prevail.

In practice, there is no duty to inform employees of a takeover. However the offeror in a takeover offer must, within its offer document, state its intention as regards the continued employment of the employees of the target company and its subsidiaries.

However, employers should be aware of the need to engage in negotiations with staff members who will be made redundant, in the event a business combination contemplates the laying off of staff. The reasons behind this decision will also have to be carefully documented, especially in the case where the matter is brought before the Redundancy Board. Depending on the evidence and pleadings and findings of the Redundancy Board, the latter may find the termination justified or unjustified and make an order, for payment of compensation, accordingly.

On the other hand, where the employees remain in employment, the new employer will ensure that the terms of employment by the new company will be no less favourable than under the previous employment contract. Failure to provide for equivalent or better terms may result in the Redundancy Board being seized of the matter, and an ultimate finding of unjustified dismissal and ensuing compensation payment.

There is no general legal framework regulating the national security aspect of acquisitions in Mauritius. However, certain regulatory approvals may be required for acquisitions of a stake in certain regulated fields such as banking.

There have been no major legal developments in the M&A landscape in recent years.

There has been no recent significant change in takeover law in Mauritius. No changes are currently contemplated either.

It is not uncommon for a bidder to build a stake prior to launching an offer or making a mandatory offer in relation to a “reporting issuer”. A “reporting issuer” is an issuer:

• who by way of a prospectus, has made an offer of securities either before or after the commencement of the SA05; or
• who has made a takeover offer by way of an exchange of securities or similar procedure (a takeover offer for a “reporting issuer” will be referred to as a “public M&A transaction”).

This will be achieved through a series of dealings, prior to contemplating making an offer. In certain cases, this may trigger a mandatory offer (see 6.2 Mandatory Offer Threshold).

However, dealings of any kind in the shares of a target company are prohibited where the relevant person has confidential or price sensitive information concerning an offer (between the time an offer is contemplated and the public announcement of the offer or termination of takeover discussions).

For a “public M&A transaction”, disclosure is triggered if an acquisition or disposition value of the asset, interest or property (being acquired or disclosed) is at least 10% of the net assets of the “reporting issuer”.

The SA05 also provides that where there is a material change, the following changes will require timely disclosure:

• any distribution of securities in Mauritius or in any other jurisdiction;
• any change in the beneficial ownership of the issuer’s securities that affects or is likely to affect the control of the issuer;
• any change of name of the “reporting issuer”;
• any reorganisation in capital, merger or amalgamation;
• a takeover bid on its own securities or made on the securities of another issuer or issuer bid;
• any significant acquisition or disposition of assets, property or joint venture interests;
• any stock split, share consolidation, stock dividend, exchange, redemption or other change in capital structure; and
• any other change that may be provided for in the FSC Rules (see 5.1 Requirement to Disclose a Deal).

Companies holding licences issued by certain regulators will require the prior approval of the regulator prior to the effective change in shareholding. For instance, and subject to certain exemptions, companies holding licences issued by the FSC are required to seek the FSC’s prior approval before a change in shareholding is effective, for any stake above 5% or a lower stake that results in a change in control.

There are similar requirements for entities licensed by the Bank of Mauritius (the “Mauritian Central Bank”), whereby the prior approval of the Mauritian Central Bank will be required.

It is possible for a company to introduce higher reporting thresholds than provided by the law. However, it is not possible to impose lower thresholds than already prescribed.

In terms of listed companies, in the context of a takeover, dealings in the securities of a target company are not suspended (except for the offeror and a person acting in concert, who will be precluded from dealing during this period).

Additionally, before the offer, any person who has confidential and price sensitive information about an offer is precluded from dealing in the shares of the target company, between the time the offer is contemplated and the public announcement of the offer is made or the takeover discussions are terminated.

A person having insider information will also not be able to deal in the shares of the bidder or the target until a public announcement is made. If they do, they will be liable for insider dealing.

Under the SA05, derivatives fall under the definition of securities. In this regard, dealings in respect of derivatives are allowed in Mauritius.

The general provisions regarding disclosure and filing will be applicable inasmuch as derivatives are deemed securities under the SA05.

In a “public M&A transaction”, an offeror (whether an existing shareholder or not) is required to disclose (as part of the offer document) its intention regarding:

• the continuation of the business of the target company;
• major changes to be introduced in the business including redeployment of fixed assets;
• long-term commercial justification of the proposed offer;
• continued employment of staff; and
• object and purpose of the acquisition and future plans.

Companies holding licences issued by certain regulators may have to provide these details to the relevant regulator. For instance, for companies licensed by the FSC and which are required to seek the FSC’s prior approval before an effective change in shareholding, the FSC may request this information as it deems fit to be able to assess the application.

There is no legal requirement under a private M&A transaction to disclose a deal (except for antitrust laws) (see 2.4 Antitrust Regulations and 2.6 National Security Review).

However, if certain necessary regulatory approvals are required (for example in the case of special licences, the approval of the FSC must be sought) disclosure of the deal must be made.

Disclosure of a prospective acquisition may also be required under individual contracts entered into by the target company, in light of change in control provisions, mandatory consents required or other types of restriction clauses.

In a “public M&A transaction”, public announcement of a firm intention (see 6.1 Length of Process for Acquisition/Sale) must be made.

Public announcement is also necessary:

• by a target company, when there is undue movement in its share price or in the volume of shares traded, whether a firm intention has been received or not;
• by an offeror, before making a firm intention, when there is undue movement in its share price or in the volume of share turnover and where the FSC has reasonable cause to believe that it is the offeror’s actions that have led to this situation;
• by an offeror where a mandatory offer is triggered (see 6.2 Mandatory Offer Threshold);
• by a target company, when an offeror has withdrawn its offer; or
• upon directions from the FSC.

A firm intention document will contain the following information:

• proposed terms of offer;
• identity of the offeror;
• confirmation by the board of the offeror that sufficient financial resources are available to satisfy the acceptance of the offer;
• details of shares already held by the offeror and/or a person acting in concert;
• details of any agreements between the offeror and/or person acting in concert and the target company; and
• conditions relating to the acceptance of the offer.

Additionally, where a transaction falls under the category of “substantial transaction” or “disclosable transaction” under the listing rules issued by the SEM, the target company must inform the SEM of the transaction and deliver a circular containing information prescribed under the listing rules in relation to the transaction (brief details of the general nature of the transaction, the basis upon which the consideration was determined, the date of the transaction, description of the trade, aggregate value of the consideration, etc).

The target company must also give public notice of the “substantial transaction” or “disclosable transaction” (see 4.2 Material Shareholding Disclosure Threshold).

The market practice on timing of disclosure will not differ from the applicable legal requirements (see 5.1 Requirement to Disclose a Deal).

There is no legal obligation for a target company to give a bidder the right to conduct due diligence.

The extent of the due diligence exercise will vary from transaction to transaction, considering the structure of the transaction, and whether it is a public or private merger or acquisition amongst other considerations.

It is common practice for the buyer to undertake legal and financial due diligence involving:

• incorporation and registration;
• review of constitutional documents;
• regulatory and licensing matters;
• ownership and directorship;
• ongoing litigation matters and issued judgments;
• employment matters and proceedings;
• environmental, intellectual property, real estate, data protection and IT;
• taxation;
• banking facilities and indebtedness;
• insolvency proceedings; and
• material agreements.

Exclusivity clauses will commonly be inserted in the term sheet or letter of intent at the outset of the M&A process. They may also be contained in non-disclosure agreements and are a matter for the parties to the transaction to negotiate.

Standstill agreements or clauses are less common in M&A activity but would also be customarily negotiated at the outset of a transaction with a view to protecting the target company during the due diligence and discovery exercise especially where several bidders are contemplating acquisition.

It is not common for offer terms and conditions to be documented in a definitive agreement. Instead they will be contained in a non-binding offer letter. Terms and conditions of an acquisition will feature in a subsequent asset or share purchase agreement, after completion of the due diligence exercise and conclusion of the negotiation phase, where indemnities and warranties (stemming from the due diligence process) will be agreed between the parties.

However, should the parties to an M&A transaction contractually agree to it, there is no impediment to witnessing offer terms and conditions in a binding document at the very outset of the process.

There is no set timeframe within which a private M&A transaction must be completed. The timeframe will vary from case to case and will be dependent on various factors including nature and complexity of the transaction, duration of due diligence/discovery exercise, length of negotiations and regulatory approvals required.

In a “public M&A transaction”, the timetable is set to start at the issuance of a firm intention from an offeror to a target company. The following steps are then taken.

• The target company will immediately issue a public announcement of a firm intention received (see 5.1 Requirements to Disclose a Deal).
• The offeror will file a copy of the offer document to the FSC and relevant securities exchange (and pay a prescribed fee to the FSC).
• Within 14 days of filing a copy of the offer document with the FSC, the offeror will communicate a copy of the offer document to the shareholders and notify the board of the target company in writing.
• Within 21 days of the communication of the offer document to the shareholders, the board of the target company will issue a reply document to enable its shareholders to make an informed decision.
• A takeover offer made to an offeree will be open for at least 35 days up to a maximum of 60 days, from the date the offer is communicated to shareholders of the offeree.

These timeframes may be affected by any variation of the offer terms, court applications or injunctive proceedings.

The obligation to make a mandatory offer would be triggered in the context of a takeover (applicable to “reporting issuers”) where a person (or together with a person acting in concert):

• acquires effective control of a company, representing more than 30% of the voting rights; or
• following dealings in securities, acquires the right to control more than 50% of the voting rights.

In this case, the offeror will be required to make an offer on all of the remaining shares of the target company and publicly announce the offer.

The offeror in this instance must also notify the FSC and relevant securities exchange of the public announcement made in relation to the mandatory offer.

Notwithstanding the above, a mandatory offer may be waived:

• upon a change in control in the target company as a result of a restructuring; or
• where the FSC is of the view that the offer is contradictory to the interests of the market, or for any other reason.

Additionally, where an offeror has, by virtue of the acceptance of an offer, acquired or has contracted to acquire not less than 90% of the shareholding of a target company, a dissenting shareholder may require the offeror to acquire their shares (upon receipt of a notice from the offeror by the dissenting shareholder).

Both cash and non-cash consideration are acceptable in Mauritius.

In business combinations, the board of a target company must ascertain, in the case of non-cash consideration, the cash value of the consideration and whether the same is fair and reasonable to the company and the shareholders.

With regards to a “public M&A transaction”, an offeror will be required to provide guarantees (in the offer document) that:

• in relation to cash consideration, sufficient financial resources are available to satisfy the acceptance of the offer; and
• in relation to non-cash consideration, that reasonable measures have been undertaken to secure full payment of the shares acquired.

The target company, in assessing a takeover offer, will appoint an independent advisor who will be responsible for advising the shareholders on whether the offer (and consideration) is fair and reasonable.

Valuation gaps, mostly occurring in private M&A transactions, will be cured through deferred consideration mechanisms or post-completion adjustment mechanisms, usually based on financial metrics to be met by the target company.

Conditions attached to a takeover offer are at the discretion of the offeror. Common conditions will typically include:

• requirement of approval by a minimum percentage of shareholders;
• approval of regulators;
• approval in relation to antitrust regulations;
• consent approvals obtained in relation to material contracts; and
• no material adverse change occurring during a determined period.

In relation to takeover offers, the firm intention document (see 5.1 Requirement to Disclose a Deal) requires that the offeror includes all conditions which relate to the acceptances the offer will be subject to in this document (see 6.5 Minimum Acceptance Conditions and 2.4 Antitrust Regulations).

Within a takeover offer, a voluntary offer to acquire all voting shares of a target company will be conditional on the offeror having received acceptance in respect of voting shares (acquired or to be acquired, before or during the offer) which will result in the offeror holding more than 50% of the voting rights.

In the context of a private M&A transaction, a condition regarding an obligation to obtain financing may be included in the transaction documents.

However, in a “public M&A transaction”, the takeover regulations in Mauritius require that the offeror, when issuing an offer document or making a firm intention to acquire shares, provide confirmation that sufficient financial resources are available to satisfy an acceptance of the offer. If the offer contains non-cash consideration, reasonable measures must have been put in place to secure full payment of the shares contemplated to be acquired.

Deal security measures can be included in transaction documents in the case of a private M&A transaction. Common deal security measures will include exclusivity, break-up fees and non-solicitation provisions.

In the case of a “public M&A transaction”, when a firm intention of an offer has been communicated to the board of a target company or where the board has reason to believe that an offer is imminent, it may not take any action in relation to the target company’s affairs which may directly or indirectly result in the offer being frustrated or deny the shareholders from deciding on the merits of the offer.

There has been no change in the regulatory provisions governing this.

In a private M&A transaction, any governance rights will be witnessed in the shareholders’ agreement negotiated between the parties, capturing the role of the bidder (and other shareholders) in the target company.

Additionally, it is customary for these agreements to cater for other protective measures such as:

• drag-along clauses;
• tag-along clauses;
• pre-emption rights;
• rights of representation on the board; and
• veto rights and control over material decisions.

A bidder gaining less than 100% has limited scope to additional governance rights but may seek to have presence on the board of the company. Where the target company is a listed company, governance considerations set out in the National Code on Corporate Governance may be applicable.

Shareholders may exercise the right to vote either by being present in person or by appointing a proxy.

The takeover rules in Mauritius provide that where a bidder has acquired or contracted to acquire not less than 90% of the voting shares, they may give notice to dissenting shareholders to acquire their voting shares and thereafter acquire the shares on the same terms as the approving shareholders.

In a “public M&A transaction”, an offer made cannot be withdrawn without the prior approval of the FSC. The parties are otherwise free to agree on any other commitments to secure a deal. This may take the form of an acceptance agreement with principal shareholders to give the bidder a degree of certainty in the acquisition being successful.

Private M&A transactions generally remain private unless voluntary disclosures are made by both or either party to the transaction.

In a “public M&A transaction”, certain disclosure requirements will apply (see 5.1 Requirement to Disclose a Deal). Announcements are generally published on the SEM website, as well as in the press and on the websites of the relevant companies.

In a private company, an issuance of shares must be notified to the ROC. The notification will be accompanied by details of the beneficial owner(s).

If any issue of shares would amount to an “offer to the public”, the issuance must comply with the prospectus-level disclosure requirements of the SA05. In addition, the prospectus must be approved and registered by the FSC.

In the case of a merger, public notice must be given within 28 days of the merger taking effect (see 4.2 Material Shareholding Disclosure Threshold).

There are exceptions to the above rules should the company concerned be a company holding a global business licence.

Bidders, as part of their offer documents, will be required to submit (in the case of an exchange of securities) details about:

• profits and losses for the last three financial years;
• assets and liabilities from the last published audited accounts;
• material changes from the last published audited accounts;
• interim or preliminary public announcement made; and
• any change in accounting policy.

The FSC may also require that the offer document provides for the description of any relevant financing arrangements.

On the other hand, in its reply document (addressed to its shareholders to enable them to make an informed decision on the offer), the target company must include the audited financial statements for the last three years, as well as details of any material changes since the last audited accounts.

Companies in Mauritius (with the exception of small private companies) must prepare their financial statements in line with international accounting standards or other internationally accepted accounting standards (more specifically applicable to global business companies, protected cell companies, group financial statements inter alia).

International accounting standards in Mauritius will include:

• standards issued by the International Accounting Standards Committee;
• the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board; and
• the accounting standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions.

In the case of a takeover offer, copies of takeover or merger documents must be submitted to the SEM for review and approval and relevant public announcements and publications must be made. Additionally, if it is deemed necessary by the FSC, the transaction documents may be disclosed to shareholders to enable them to make an informed decision.

In the case of a private offer, the transaction documents or offer documents must be disclosed to the FSC.

In terms of a private M&A transaction, it may be necessary to disclose transaction documents to regulatory bodies for the purposes of obtaining the requisite approvals.

Other than the duties of directors to act in good faith and in the best interests of the company, directors of a target company will, at all times when advising or informing the shareholders about a takeover:

• act only in their capacity as directors without regard to any personal or family interests; and
• have regard only to the interests of the shareholders, employees and creditors.

There is no standard practice of establishing special or ad hoc committees in business combinations.

Mauritian courts are reluctant to interfere in the judgement of the board of directors.

Advice from financial advisers, legal advisers and tax advisers is commonly given to directors in a business combination.

There have been several cases in Mauritius dealing with conflicts of interest of directors, managers, shareholders or advisers.

There are no restrictions regarding hostile tender offers.

With regards to a “public M&A transaction”, where an offer has been made or is imminent, the board cannot take any action which may directly or indirectly result in the offer being frustrated or the shareholders of the target company being denied an opportunity to decide on the merits of an offer.

Nonetheless, there are certain actions that the board of an offeree may still take with the prior approval of the shareholders of the target company. These are:

• issue shares;
• issue or grant options in respect of any unissued shares;
• create, issue or permit the creation or issue of any securities carrying rights of conversion into or subscription for the shares of the offeree;
• sell, dispose of or acquire or agree to sell, dispose of or acquire assets of a material amount or otherwise than in the ordinary course of business;
• enter into contracts, including service contracts, otherwise than in the ordinary course of business; or
• cause the offeree, any of its subsidiaries or associated companies to purchase or redeem any shares in the offeree or provide financial assistance for any such purchase.

There cannot be defensive measures following an offer or if an offer is imminent in relation to a “reporting issuer”. Nonetheless, most defensive measures are typically built into the constitution of those companies such as the requirement for supermajority votes for certain matters.

When enacting defensive measures, directors are required to adhere to their fiduciary duties and to treat all shareholders equally under similar circumstances (see 8.1 Principal Directors’ Duties).

Moreover, once an offer has been made or is imminent, in the context of a “reporting issuer”, the board’s ability to implement defensive measures is even more limited (see 9.2 Directors’ Use of Defensive Measures).

In the case of a “public M&A transaction”, directors cannot say no. The board of the offeree has the power, in the interest of its shareholders, to appoint an independent adviser, The adviser will:

• advise the board of the offeree as to whether the offer is fair and reasonable;
• carry out or cause to be carried out the valuation of the offeree; and
• submit a report to the board of the offeree.

The board of the offeree will then consider the report of the independent adviser and make a recommendation in good faith to the shareholders.

Litigation is not very common in M&A deals in Mauritius. Instead parties resort to arbitration.

Although not very common, litigation is seen at post-completion stage and more often than not in relation to breaches of representations or warranties.

There does not currently seem to be litigation revolving around “broken-deal” disputes.

There is little data on shareholder activism in Mauritius.

Activists do not seek to encourage companies to enter into M&A transactions, spin-offs or major divestures.

There are matters where shareholders (not necessarily activists) have tried to interfere with the completion of announced transactions. This interference usually takes the form of court litigation to try and stop transactions.