Competition Commission Clears Up Confusion on Internal Restructurings

The Competition Commission of South Africa has published draft guidelines to clarify when businesses need approval for internal restructurings. Many companies have been unsure whether moving assets or operations between subsidiaries within the same corporate group requires merger notification.

Key Proposals in the Draft Guidance

The good news is that the Commission has now confirmed that "purely internal" restructurings—where control stays within the same parent company and no outside shareholders are affected—do not need approval.

However, if a restructuring affects minority shareholders who have special control rights, such as veto power over budgets, key business decisions, or management appointments, the transaction may still require approval. This is because the restructuring could shift decision-making power, even if the overall owner remains the same.

On the other hand, ordinary minority protections—such as rights over dividend payments or shareholding structure—do not trigger a merger notification.

This clarification is great news for businesses, as it reduces unnecessary regulatory red tape for internal restructurings. However, accountants and corporate advisors should still carefully assess any restructuring to check whether minority shareholder rights are affected.

Provide Your Feedback

The Commission has invited public comments on the draft guidelines until 21 February 2025.