CHAMBERS GLOBAL PRACTICE GUIDES

Technology M&A
2025
Definitive global law guides offering
comparative analysis from top-ranked
lawyers

Singapore: Law & Practice

Terence Quek, Benjamin Cheong,
Hoon Chi Tern and Favian Tan
Rajah & Tann Singapore

Singapore: Trends & Developments

Terence Quek, Benjamin Cheong,
Favian Tan and Rajesh Sreenivasan
Rajah & Tann Singapore
SINGAPORE
Malaysia

Singapore

Law and Practice Indonesia

Contributed by:
Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan
Rajah & Tann Singapore

Contents
1. Market Trends p.6
1.1 Technology M&A Market p.6
1.2 Key Trends p.6

2. Establishing a New Company, Early-Stage Financing and Venture

Capital Financing of a New Technology Company p.7
2.1 Establishing a New Company p.7
2.2 Type of Entity p.7
2.3 Early-Stage Financing p.7
2.4 Venture Capital p.8
2.5 Venture Capital Documentation p.8
2.6 Change of Corporate Form or Migration p.9

3. Initial Public Offering (IPO) as a Liquidity Event p.9

3.1 IPO v Sale p.9
3.2 Choice of Listing p.9
3.3 Impact of the Choice of Listing on Future M&A Transactions p.9

4. Sale as a Liquidity Event (Sale of a Privately Held Venture Capital-

Financed Company) p.10
4.1 Liquidity Event: Sale Process p.10
4.2 Liquidity Event: Transaction Structure p.10
4.3 Liquidity Event: Form of Consideration p.10
4.4 Liquidity Event: Certain Transaction Terms p.10

5. Spin-Offs p.10
5.1 Trends: Spin-Offs p.10
5.2 Tax Consequences p.11
5.3 Spin-Off Followed by a Business Combination p.12
5.4 Timing and Tax Authority Ruling p.12

6. Acquisitions of Public (Exchange-Listed) Technology Companies p.13

6.1 Stakebuilding p.13
6.2 Mandatory Offer p.14
6.3 Transaction Structures p.14
6.4 Consideration and Minimum Price p.15
6.5 Common Conditions for a Takeover Offer/Tender Offer p.15
6.6 Deal Documentation p.16

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SINGAPORE CONTENTS

6.7 Minimum Acceptance Conditions p.16

6.8 Squeeze-Out Mechanisms p.17
6.9 Requirement to Have Certain Funds/Financing to Launch a Takeover Offer p.17
6.10 Types of Deal Protection Measures p.17
6.11 Additional Governance Rights p.18
6.12 Irrevocable Commitments p.18
6.13 Securities Regulator’s or Stock Exchange Process p.18
6.14 Timing of the Takeover Offer p.19

7. Overview of Regulatory Requirements p.20

7.1 Regulations Applicable to a Technology Company p.20
7.2 Primary Securities Market Regulators p.20
7.3 Restrictions on Foreign Investments p.20
7.4 National Security Review/Export Control p.20
7.5 Antitrust Regulations p.21
7.6 Labour Law Regulations p.22
7.7 Currency Control/Central Bank Approval p.24

8. Recent Legal Developments p.24

8.1 Significant Court Decisions or Legal Developments p.24

9. Due Diligence/Data Privacy p.24

9.1 Technology Company Due Diligence p.24
9.2 Data Privacy p.25

10. Disclosure p.26

10.1 Making a Bid Public p.26
10.2 Prospectus Requirements p.26
10.3 Producing Financial Statements p.27
10.4 Disclosure of Transaction Documents p.27

11. Duties of Directors p.27

11.1 Principal Directors’ Duties p.27
11.2 Special or Ad Hoc Committees p.27
11.3 Board’s Role p.28
11.4 Independent Outside Advice p.28

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SINGAPORE Law and Practice
Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore

Rajah & Tann Singapore is a leading full-ser- and e-commerce. The team is highly adept at
vice law firm and member of Rajah & Tann Asia, providing practical advice on complex issues
which is one of the largest regional networks that often arise in tech M&A transactions – from
and has more than 1,000 fee-earners. With a conducting IP and cybersecurity due diligence
thriving tech M&A practice representing inves- to drafting transitional service agreements and
tors and enterprises involved in all facets of the invention assignment agreements and design-
data and digital economy, the team has acted ing data protection policies. The firm has of-
frequently in acquisitions/divestments and in- fices in Cambodia, China, Indonesia, Lao PDR,
vestments into growth-stage companies oper- Malaysia, Myanmar, Thailand, Vietnam and the
ating in blockchain, cryptocurrency, agrifood Philippines, and dedicated desks focusing on
tech, fintech, deep tech, legal tech and med- Brunei, Japan and South Asia.
tech, in addition to social networking, gaming

Authors
Terence Quek is the deputy Benjamin Cheong is the deputy
head of Rajah & Tann head of Rajah & Tann’s TMT
Singapore’s M&A practice, with practice. Throughout his career,
more than 22 years of he has successfully served
experience in M&A, private clients across a wide range of
equity/venture capital deals, industries including IT, media,
local and cross-border joint ventures, hospitality, telecommunications,
corporate restructurings, corporate rescues semiconductors, life sciences, financial
and general commercial law. He has advised services, and insurance. Benjamin’s expertise
on the sale and purchase of companies, extends to cross-border joint ventures,
undertakings and businesses in almost every mergers and acquisitions, and technology
sector of industry, including technology, outsourcing deals. He possesses a deep
banking, insurance, manufacturing, understanding of the legal issues surrounding
pharmaceuticals, property development and emerging technologies such as blockchain and
healthcare. Terence is also actively involved in AI, enabling him to lead these transactions
a wide spectrum of investment transactions on effectively. Benjamin’s ability to keep pace with
both the buy and sell sides, ranging from seed the latest technological trends also allows him
financing to early-stage investments to growth to offer comprehensive and informed
capital, as well as exits, and joint venture deals representation and advice on deals involving
involving both local and cross-border entities. cutting-edge technology.

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Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore

Hoon Chi Tern is the deputy Favian Tan is a partner at Rajah

head of the capital markets & Tann Singapore who
practice and a partner in the specialises in M&A and has
M&A practice at Rajah & Tann more than a decade of
Singapore. Known for his experience working on
innovative approach and clear significant M&A transactions
articulation of legal options and permutations, involving private and public listed companies,
Chi Tern has substantial experience in a wide REITs and business trusts. His main practice
range of notable corporate transactions, areas encompass share and asset acquisitions
including public and private M&A, private and disposals, public takeovers and
equity investments and buyouts, local and privatisations, REIT mergers, joint ventures and
international IPOs, secondary listings and private equity and venture capital investments,
fundraising, as well as privatisations. He also as well as advising on general corporate and
regularly advises SGX-ST-listed issuers on commercial matters. He also routinely advises
continuing obligations and compliance clients on joint ventures, with a recent focus on
matters. Chi Tern obtained his BCL from the sustainability and technology-related joint
University of Oxford in 2009. ventures.

Rajah & Tann Singapore

9 Straits View #06–07
Marina One West Tower
Singapore 018937

Tel: +65 653 53 600

Email: [email protected]
Web: www.rajahtannasia.com

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SINGAPORE Law and Practice
Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore

1. Market Trends operations. Investors are increasingly drawn to

opportunities that align with global megatrends
1.1 Technology M&A Market and the city-state’s strategic priorities.
Start-up funding in South-East Asia continued
to slow through the third quarter of 2024, result- There is also hope and expectation of a revival
ing in a historic low for the first nine months of in M&A activity driven by further anticipated rate
the year. cuts.

The cumulative capital deployed year-to-date The specific sectors highlighted in the forego-
of SGD3.26 billion is less than half of what was ing are expected to remain pivotal in supporting
raised during the same period in 2020, when the the more robust M&A landscape anticipated for
COVID-19 pandemic first affected the market, the rest of 2024 and continuing into 2025. Cur-
underscoring a prolonged downturn in funding rent anecdotal evidence suggests early signs
activity amid ongoing global economic chal- of recovery, indicating the potential for positive
lenges. surprises in the year ahead.

Singapore however, maintained its leading posi- In addition, as part of Singapore’s Green Plan
tion in South-East Asia, drawing in 65.6% of the 2030, the Singapore government has been pro-
total regional funding in the first nine months of moting the use of electric vehicles (EVs) to facili-
2024, a share consistent with last year’s perfor- tate its broader efforts to reduce carbon emis-
mance. This steady inflow highlights Singapore’s sions and transition to a more sustainable and
resilience and appeal to investors, even amid a energy-efficient transportation system. Singa-
broader regional funding slowdown. pore’s ambitious EV adoption goals are likely to
create new opportunities for M&A activity in the
Additionally, Singapore continues to lead in the region. As Singapore races towards widespread
vertical funding of software and IT, accounting EV adoption, there will be increasing interest in
for 89% and 81% of South-East Asia’s volume innovative businesses working on technologies
and value, respectively, in the first nine months like EV batteries and EV charging infrastruc-
of 2024. ture. Both start-ups and established companies
that focus on these technologies may become
1.2 Key Trends attractive acquisition targets for investors look-
Notwithstanding the challenging climate for the ing to tap into the rapidly expanding EV market
region described in 1.1 Technology M&A Mar- in the region.
ket, tech-related M&A and fundraising activity
in Singapore continues in specific sectors such
as artificial intelligence (AI) and digital infrastruc-
ture, sustainability and energy transition, semi-
conductors, e-commerce, and foodtech.

The AI landscape, in particular, has been under

the spotlight in 2024, with keen interest amongst
investors in AI infrastructure and AI-related

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2. Establishing a New Company, nee shareholders and their nominators. Further,

Early-Stage Financing and Venture enhanced measures have been introduced
Capital Financing of a New where there is no registrable controller – or the
entity is unable to identify the registrable con-
Technology Company
troller – where they are required to identify indi-
2.1 Establishing a New Company viduals with executive control as their registrable
New start-ups based in Singapore typically controllers.
incorporate a private company in the country.
Some South-East Asian start-ups incorporate a With effect from 28 June 2023, new exemptions
Singapore private company to function as the have been introduced for foreign companies
holding company and use the Singapore com- from the requirements of keeping a register of
pany to conduct fundraising, while wholly owned their members, the RORC and RONS, if they sat-
subsidiaries are incorporated in the relevant isfy certain prescribed requirements.
countries to conduct operations. This is due to
the ease of access to debt and equity funding The minimum paid-up capital required to incor-
in Singapore, given the exponential growth in porate a private company is SGD1 (or its equiv-
the number of family offices – as well as private alent in foreign currency). However, licensing
equity and venture capital funds – setting up in conditions in specific industries may impose a
the country. higher paid-up capital requirement.

Requirements 2.2 Type of Entity

The process of incorporating a private company For start-ups, private companies limited by
can be completed in as little as one day, as elec- shares are the most commonly incorporated
tronic filings are made with the Accounting and entities in Singapore owing to the advantage of
Corporate Regulatory Authority of Singapore a separate legal personality. Investors, advisers
(ACRA). However, prior to the incorporation, cor- and service providers are also most familiar with
porate secretarial providers require the directors private companies limited by shares, allowing
and shareholders to prepare certain documents, for ease of administration at the early stages of
including KYC checks. Post-completion, in addi- growth.
tion to the electronic register of members, com-
panies are also required to privately maintain a Other options available to start-ups include
register of registrable controllers (RORC). This companies limited by guarantee, general part-
sets out information about the company’s con- nerships, limited partnerships, limited liability
trollers, including: partnerships and variable capital companies.
However, these have other specific uses and
• their names and identifying details; and are not generally relied upon by entrepreneurs.
• information on their citizenship or place of
registration (in the case of legal entities). 2.3 Early-Stage Financing
The profile of seed investors in early-stage
Companies are required to privately maintain a financing varies, as it includes friends and fam-
register of nominee shareholders (RONS) con- ily and angel/seed investors at the seed stage,
taining the prescribed particulars of the nomi- and family offices and venture capital financing

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(both foreign and local venture investors) at the 2.5 Venture Capital Documentation
series A stage and beyond. There is no particu- Law firms in Singapore tend to be experienced
larly dominant source of financing. in handling the various types of documentation
typically used for venture investments in start-
Sovereign wealth funds may take stakes in start- ups, such as subscription agreements and
ups, even in the early stages, if their business or shareholders’ agreements. Depending on the
technology would fulfil a national goal (eg, food transaction structure, option agreements and
security, financial services, health and tech- warrant agreements can be entered into to meet
nological innovation). Government-sponsored the commercial objectives of the investment.
funds may provide early-stage financing through
matching investments (either debt or equity) with A Typical Investment
certain venture capital investors. A typical investment would involve the
investor(s) subscribing to shares using a sub-
Other forms of government support include the scription agreement, and the shareholders of the
enterprise financing scheme and grants to fund start-up company entering into a shareholders’
operating costs and projects. However, govern- agreement to govern the rights of the investors.
ment support and sponsorship are usually con- Shares subscribed to by investors are typically
ditional on certain requirements being fulfilled, preference shares, which confer additional rights
such as: over ordinary shares – for example, conversion
rights and dividend and liquidation preferences.
• nationality requirements for ownership; and
• a focus on certain areas (eg, advanced manu- VIMA Documentation
facturing, medical technology, agriculture/ For early-stage investments, investors and
food technology). founders may consider using venture capital
investment model agreements (VIMAs), a model
Investments and government grants are well documentation set first launched in 2018. The
documented through subscription agreements, VIMA documentation was drafted with input from
debentures and warrants. These investments are investors, law firms and other parties – including
private contracts and are usually kept confiden- the Singapore Venture Capital & Private Equity
tial. Association – and aims to reduce the transaction
costs and time taken in negotiation.
2.4 Venture Capital
Venture capital from both foreign and local ven- The VIMA documentation is governed by Sin-
ture investors is readily available. Investments by gapore law and includes templates for non-
government-linked corporations are also com- disclosure agreements, convertible agreements
mon and available. As regards foreign venture regarding equity, convertible loans, term sheets,
capital funds, there is keen interest from inves- subscription agreements and shareholders’
tors globally (including those from Asia, Europe agreements for a Singapore-incorporated pri-
and the USA). vate company.

The initial model agreements have since been

updated, and new documents are available

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(VIMA 2.0). Revisions include the incorporation based start-ups have several options for securi-
of more annotations and alternative provisions, ties exchanges, including Singapore, Hong Kong
while the new documents include templates for: and New York. If a trade sale occurs, it is not
uncommon for Singapore-based start-ups to be
• convertible notes; acquired by foreign buyers looking to gain quick
• employee share option scheme (ESOS) prim- access to the regional market or to bolster their
ers; technology and IP assets.
• model constitutions;
• mutual non-disclosure agreements; Depending on the size of the company, both
• founders’ agreements; options of an IPO and a trade sale would be con-
• employee deeds of assignment of IP; sidered. Typically, larger companies with growth
• a list of key terms for employees; and expansion plans would opt for an IPO.
• share incentive plans; and
• an ESG letter of agreement. 3.2 Choice of Listing
The Singapore Exchange (SGX) is one option for
2.6 Change of Corporate Form or Singapore companies looking to raise capital
Migration and list on an exchange. Other common options
Start-ups typically continue to remain in the include the Australian Securities Exchange, the
same corporate form. One restriction Singa- Stock Exchange of Hong Kong, the New York
pore-incorporated private companies need to Stock Exchange (NYSE) and Nasdaq.
be aware of should they wish to remain private
is the limit on the number of shareholders, which The SGX tends to attract companies based in
is 50 (subject to certain exceptions). Singapore- traditional sectors such as property and manu-
incorporated private companies typically convert facturing. Technology companies, on the other
to a public company (which has no restrictions hand, have mostly chosen to list on foreign
on the number of shareholders) prior to an IPO, exchanges, owing to the better valuations avail-
or where they have more than 50 shareholders. able.

There has also been an uptick in inversions – ie, 3.3 Impact of the Choice of Listing on
when start-ups primarily based in other Asian Future M&A Transactions
jurisdictions restructure to become a Singapore With regard to Singapore-incorporated compa-
holding company. nies, there is presently a squeeze-out under the
Companies Act 1967 of Singapore (the “Com-
panies Act”). This applies to all Singapore-incor-
3. Initial Public Offering (IPO) as a porated companies by law, irrespective of their
Liquidity Event choice of listing jurisdiction.

3.1 IPO v Sale

Investors in start-ups are generally open to both
options, and these are drafted accordingly in
the transaction documents for venture capital
investments. If a listing is chosen, Singapore-

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4. Sale as a Liquidity Event (Sale cases indemnities – to a buyer. Although the use
of a Privately Held Venture Capital- of an escrow holdback depends on the particular
Financed Company) risks identified by the buyer during the course
of its due diligence, this is not generally seen
4.1 Liquidity Event: Sale Process in Singapore transactions because most ven-
While considerations for the type of sale pro- ture capital investors would want a clean exit.
cess differ in each situation, bid processes are (Indeed, most would need a clean exit, in order
increasingly favoured for the sale of relatively to wind up the fund and provide returns to their
large venture capital-financed companies – and limited partners (LPs))
this ostensibly helps with price discovery.
Warranty and indemnity insurance (more com-
There have also been several instances in which monly known as “W&I insurance”) is increas-
the business partners of targets, having worked ingly popular in Singapore, especially for larger
with the founders and management team for a transactions involving private equity and venture
number of years, have initiated bilateral acquisi- capital investors who want to ensure a clean exit
tions. from their investment with little or no residual
liability.
4.2 Liquidity Event: Transaction Structure
In a trade sale (as opposed to an IPO), it is more In the current economic climate, and where there
typical for the existing venture capital investors is a price valuation gap between the buyer and
to make a clean exit. As trade sales are typically founders looking to exit, earn-out mechanisms
entered into by the buyer for strategic reasons, it are also on the rise in order to bridge the valu-
is not common for other venture capital investors ation gap.
to remain as shareholders in a company that is
the target of a trade sale.
5. Spin-Offs
4.3 Liquidity Event: Form of
Consideration 5.1 Trends: Spin-Offs
Most transactions are done on a cash basis. Spin-Offs
Spin-offs involving the sale of assets or the sale
However, where the transaction involves the of shares of a subsidiary company are possible.
founders or management remaining in the tar- The usual considerations in relation to an asset
get company to work in a certain capacity, it is sale apply, thereby allowing the buyer to choose
possible for these individuals to receive earn-out the assets it acquires and leave the rest of the
shares from the buyer as part of the purchase assets and liabilities with the seller. Tax and reg-
consideration – particularly when the buyer is a ulatory considerations on the part of both the
public or soon-to-be public company. seller and buyer are also relevant when parties
are structuring the transaction.
4.4 Liquidity Event: Certain Transaction
Terms Sale of Shares
Founders are commonly expected to provide Generally, the sale of shares is a more straight-
representations and warranties – and in certain forward process, which enables a buyer to take

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Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore

over an entire business with minimal impact on Unless it is contractually agreed between the
the business operations. As historical liabilities parties, the buyer is liable to pay the stamp duty.
are being transferred, the warranties and indem-
nities for a share sale should be heavily nego- Typically, shareholders of the parent company
tiated. In a share sale, sellers are expected to that will receive shares in the spun-off company
provide: are liable to pay stamp duty. Stamp duty relief
may be applicable in instances where the shares
• warranties in relation to the company and the are transferred between associated entities.
business; and However, one of the main conditions required for
• specific indemnities for known liabilities and a relief application is valuable consideration for
for other potential breaches. the transfer of shares. Where the shares in the
spun-off company are distributed to sharehold-
It is common to provide an indemnity or tax cov- ers of the parent company without valuable con-
enant that specifically covers tax issues – with sideration, stamp duty relief is unlikely to apply.
a different limit on the indemnified amount and
the time period in which to make a claim against In relation to asset transfers, buyer’s stamp duty
a seller. is payable by the buyer for documents executed
for the transfer or sale and purchase of immov-
5.2 Tax Consequences able property located in Singapore. The buyer’s
Depending on the structure of the transaction stamp duty is calculated based on either the
and the profile of the seller and buyer, various actual consideration paid or the market value of
forms of tax apply. the property (whichever is higher).

Stamp Duty Assuming the properties owned by technology

In the case of the sale of a private company to a companies are non-residential properties, these
third-party buyer, instruments relating to shares are the current stamp duty rates:
in a Singapore-incorporated company and
immovable property are subject to stamp duty. • 1% on the first SGD180,000;
• 2% on the next SGD180,000;
Stamp duty is payable in relation to the transfer • 3% on the next SGD640,000;
of shares in a private company incorporated in • 4% on the next SGD500,000; and
Singapore. In practice, the most common instru- • 5% on the remainder.
ment (document) attracting stamp duty under the
First Schedule to the Stamp Duties Act 1929 of Where the immovable property being trans-
Singapore is the share transfer form. The amount ferred is a residential property or has a residen-
of stamp duty payable in such cases is 0.2% of tial component (ie, the property is approved for
the higher of: residential purposes and/or within an area zoned
residential, whether fully or partially), a higher
• the actual consideration paid; and rate of buyer’s stamp duty and additional buyer’s
• the net asset value of the shares. stamp duty may also be payable on the residen-
tial component.

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In a sale of industrial immovable property, which The GST rate, which is currently set at 8%, will
some relatively mature technology companies be further increased to 9% with effect from 1
may own and occupy, the seller may be subject January 2024.
to seller’s stamp duty if the property is disposed
of within three years of purchase. The seller’s Tax Considerations of the Buyer and Seller
stamp duty rate for these properties depends on Depending on the tax residency of the buyer
their holding period and is as follows: and seller, the asset or share purchase may be
treated as revenue or capital. There is no capital
• if held up to one year from time of acquisition gains tax in Singapore. The issue of calculat-
to the time of sale – 15% on the sale price ing the balancing allowance or balancing charge
or market value of the property, whichever is may also arise when fixed assets (on which capi-
higher; tal allowances have previously been claimed) are
• if held for more than one year and up to two involved in an asset purchase. Factors such as
years: 10% on the sale price or market value allowances and exemptions should be consid-
of the property, whichever is higher; and ered by each party, and it is common for tax
• if held for more than two years and up to advisers to be engaged by both the seller and
three years: 5% on the sale price or market the buyer in a transaction.
value of the property, whichever is higher.
5.3 Spin-Off Followed by a Business
As with the stamp duty payable for the transfer Combination
of shares, the responsibility to pay the stamp A spin-off followed by a business combination is
duty in an asset sale is on the buyer but can be possible in Singapore and, although there is no
contractually allocated. fixed structure through which it may be effected,
one option is to use a scheme of arrangement
No stamp duty is payable where new shares are pursuant to Section 210 of the Companies Act.
issued and allotted to the subscribers. Hence, A scheme of arrangement requires the approval
spin-offs that are structured to involve minimal of the majority of the target company’s current
transfers of shares or assets would reduce the shareholders, representing at least 75% of the
liability to pay stamp duty at the corporate and value of the voting shares, either in person or
shareholder level. by proxy.

Goods and Services Tax (GST) If the company is listed or regulated, this must
Generally, GST is charged at the prevailing be done in line with the relevant legislation and
rate by GST-registered businesses on all sales listing rules.
of goods and services in Singapore. However,
in a transfer of a business as a going concern 5.4 Timing and Tax Authority Ruling
(TOGC), the transfer of the assets can be treat- The timing of a spin-off depends on the trans-
ed as an excluded transaction, and GST is not action structure and the time needed to obtain
chargeable – provided certain conditions are consent and fulfil the required conditions, which
met. The seller or the buyer may claim input tax are particular to each transaction.
for the GST incurred on certain expenses relat-
ing to the TOGC.

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While a tax ruling is not mandatory, parties may shareholders or unit-holders and (ii) net tangi-
apply to the Comptroller of Income Tax (or GST) ble assets (NTAs) of SGD5 million or more.
for an advance ruling in order to ascertain how
a proposed arrangement will be treated for tax In the context of an acquisition of a public com-
purposes. An advance ruling only applies to the pany to which the Takeover Code applies, a buy-
applicant and the particular arrangement that er is not prohibited from building a stake in the
is the subject of the ruling. The Comptroller is target company prior to making an offer. How-
legally bound to apply the tax treatment detailed ever, the buyer would generally be subject to
in the advance ruling to the person and the substantial shareholder disclosure obligations,
arrangement stated in the ruling for the duration which require the substantial shareholder to
of the period in which the ruling is valid. disclose to the target company (in a prescribed
form) when the following occur:
Generally, depending on the complexity of the
matter, the Comptroller aims to provide a ruling • the shareholder becomes or ceases to be a
within eight weeks. Where the ruling request is substantial shareholder of the company (a
a complex one, the Comptroller will inform the “substantial shareholder” is a person who has
applicant that additional time is required and an interest of at least 5% in the total voting
provide a general timeframe within which the rul- shares in a target company); and
ing will be issued. In exceptional circumstances, • there is a change in the percentage level of
where the Comptroller agrees to the request for interests in the voting shares of the target
an express ruling, the ruling can be issued within company.
six weeks.
The substantial shareholder has to inform the
target company within two business days of
6. Acquisitions of Public becoming aware of the change, and the target
(Exchange-Listed) Technology company will then disseminate the information
Companies through an announcement on the SGX. In terms
of stakebuilding, the buyer need not state the
6.1 Stakebuilding purpose of the acquisition of its stake.
The Singapore Code on Takeovers and Merg-
ers (the “Takeover Code”) is issued by the Mon- However, where there are reasonable grounds
etary Authority of Singapore (MAS) and applies to suspect that the buyer’s actions have contrib-
to takeovers of: uted in some way (whether through purchase of
the target company’s shares or otherwise), the
• corporations and business trusts with a pri- responsibility for making an announcement will
mary listing in Singapore; normally rest with the buyer if, before the target
• Singapore-incorporated companies or Singa- company’s board is approached:
pore-registered business trusts with a primary
listing overseas; • the target company is the subject of rumour
• real estate investment trusts; and or speculation about a possible offer; or
• unlisted public companies and unlisted reg-
istered business trusts with (i) more than 50

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• there is undue movement in its share price or acting in concert with the buyer) that carry
a significant increase in the volume of share 30% or more of the voting rights of the com-
turnover. pany; or
• when a buyer (together with persons acting in
Should the buyer announce its plans or inten- concert with the buyer) holds between 30%
tions with regard to the target company without and less than 50% of the voting rights in a
a firm intention to make an offer for the target company and, within any six-month period,
company, the Securities Industry Council (SIC) the buyer (or any person acting in concert
may require that the buyer clarify its intentions with the buyer) acquires additional shares
within a specific period of time. carrying more than 1% of the voting rights.

On 7 October 2022, the SIC issued the Practice 6.3 Transaction Structures
Statement on the Waiver of the Application of The following transaction structures are typically
the Singapore Code on Take-overs and Merg- used for the acquisition of a public company in
ers to Unlisted Public Companies (the “Practice Singapore.
Statement”), which sets out the procedure for an
unlisted public company incorporated in Singa- General Offers
pore with more than 50 shareholders and NTAs Essentially, takeovers can be either mandatory
of SGD5 million or more to obtain a waiver in (ie, when the buyer is obliged to do so under the
respect of the Takeover Code (the “Code Waiv- Takeover Code) or voluntary (ie, when they occur
er”). Unlisted public companies that do not have in the absence of such obligation). An offer can
more than 50 shareholders and NTA of SGD5 or – in the case of a mandatory offer – must be
million may also apply for a Code Waiver in for either:
advance if they are soon to fall within the ambit
of the Takeover Code. • all the outstanding voting capital of the target
company; or
The Practice Statement has helped ease the • only part of the target company’s outstand-
regulatory and compliance requirements of ing voting capital (by way of a partial takeover
the Takeover Code for start-ups with a size- offer).
able investor base (eg, due to previous rounds
of successful series fundings) looking to raise Different rules apply to the different types of
additional equity financing, including from the offers, as detailed elsewhere in this chapter.
venture capital and private equity space.
Schemes of Arrangement
6.2 Mandatory Offer A scheme of arrangement is a court process
Under the Takeover Code, unless a waiver is that allows a company to agree on matters with
obtained from the SIC, a mandatory offer must shareholders, including an agreement to transfer
be made to all shareholders of a target company shares to a bidder in exchange for cash or other
in either of the following situations: forms of consideration. The process is target
company-driven – that is, the target company
• when a buyer acquires shares (aggregated makes the application to the court – and is thus
with the shares held or acquired by persons dependent on a co-operative target company.

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As mentioned in 5.3 Spin-Off Followed by a Voluntary Offer

Business Combination, a scheme of arrange- In respect of a voluntary offer, the consideration
ment requires a majority of the shareholders to can be in the form of cash or securities (or a
be present and voting (either in person or by combination thereof) in an amount no less than
proxy) at a meeting, representing at least 75% the highest price paid by the offeror – or any
in value of the shares voted at the meeting to person acting in concert with the offeror – for
approve it before an application can be made to voting rights in the target company both:
the court for sanction. Once an order sanction-
ing the scheme has been issued by the court • during the offer period; and
and lodged with the ACRA, it binds all the tar- • within the three months prior to its com-
get company’s shareholders – irrespective of mencement.
whether they attended the meeting and how
they voted. Rules Under the Takeover Code
Notwithstanding the foregoing, the Takeover
Generally (but with some exceptions), a scheme Code contains a rule that requires offers to be
of arrangement involving a public company is in cash or accompanied by a cash alternative if:
also subject to the Takeover Code. However, the
SIC may – subject to conditions – exempt the • the offeror and its concert parties have
scheme from specific provisions of the Takeover bought for cash – during the offer period and
Code. within the six months prior to its commence-
ment – shares of any class under offer in the
6.4 Consideration and Minimum Price target company carrying 10% or more of the
Acquisitions involving public companies typical- voting rights of that class; or
ly involve cash offers, which may not necessarily • the SIC is of the view that a cash offer is
be unique to the technology industry. Depend- necessary.
ing on the form of the acquisition structure (as
further elaborated on elsewhere in this chapter), In such cases, the offer price must be no less
different types of consideration may be permit- than the highest price paid by the offeror and its
ted. concert parties for shares in the target company
during the offer period and within six months
Mandatory General Offer prior to its commencement.
A mandatory general offer must be made in cash
– or be accompanied by a cash alternative – in 6.5 Common Conditions for a Takeover
an amount no less than the highest price paid Offer/Tender Offer
by the offeror (or any person acting in concert Conditions may be imposed regarding antitrust
with the offeror) for voting rights in the target considerations in order to make the offer subject
company both: to approval by the Competition and Consumer
Commission of Singapore (CCCS) and, where
• during the offer period; and applicable, foreign regulators. Other conditions
• within the six months prior to its commence- may be included, subject to the consent of the
ment. SIC, but such conditions generally should be
objective and reasonable.

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Mandatory Offer unless a number of conditions are met, includ-

Except with the consent of the SIC, a mandatory ing the offer being made conditional upon the
offer must be conditional upon the buyer receiv- approval of the target company’s shareholders.
ing acceptances that would result in the buyer
(and parties acting in concert with the buyer) 6.6 Deal Documentation
holding more than 50% of the voting rights in In typical public takeover scenarios, where a
the target company. buyer wishes to acquire a target company by
way of a general offer (whether mandatory, vol-
Voluntary Offer untary or otherwise), there is no requirement for
A voluntary offer must be conditional upon the the buyer to enter into a transaction agreement
buyer receiving acceptances that would result with the target company.
in the buyer (and parties acting in concert with
the buyer) holding more than 50% of the voting In the context of a scheme of arrangement, an
rights in the target company. implementation agreement is typically entered
into between the buyer and the target company
The buyer must obtain approval from the SIC in in order to set out:
order to:
• the terms and conditions under which the
• impose a condition requiring a higher level of transaction will be implemented;
voting rights in the target; or • the conditions precedent to the implementa-
• impose other conditions. tion of the scheme;
• representations and warranties, and under-
These conditions cannot depend on the subjec- takings; and
tive interpretation or judgment – nor lie, in the • certain prescribed occurrences that would
hands – of the buyer. permit either the buyer or the target company
to terminate the implementation agreement
A pre-conditional voluntary offer may be used (subject to the consent of the SIC).
if a firm intention to make an offer has been
announced, subject to the fulfilment of certain 6.7 Minimum Acceptance Conditions
pre-conditions. As with the mandatory offer, As described in 6.5 Common Conditions for a
such conditions must be objective and reason- Takeover Offer/Tender Offer, mandatory general
able. offers are conditional upon the buyer receiving
acceptances that would result in the buyer (and
Partial Offer the parties acting in concert with the buyer) hold-
All partial offers require the prior consent of the ing more than 50% of the voting rights in the
SIC. Consent will normally be given for a partial target company.
offer that will not result in the offeror (and parties
acting in concert with the offeror) holding 30% or For voluntary offers, the offer may be condition-
more of the voting rights in the target company. al upon receipt of a higher level of acceptance
Consent will not be given for offers for between (with the consent of the SIC). A higher threshold
30% and 50%. Consent will not be given for of 90% is typically set when the buyer is seek-
offers for more than 50% of the voting rights ing to privatise the target through the use of the

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compulsory acquisition mechanisms described persons”) – a body corporate is “con-

in 6.8 Squeeze-Out Mechanisms. trolled” by the offeror or excluded persons
if (i) the offeror or excluded persons is/are
6.8 Squeeze-Out Mechanisms entitled to exercise or control the exercise
Under the Companies Act, the power of compul- of not less than 50% of the voting power
sory acquisition arises where a scheme or con- in the body corporate, or such percentage
tract involving the transfer of all the shares (or of the voting power in the body corporate
all the shares in any particular class) in the tar- as may be prescribed, whichever is lower;
get company to the offeror has been approved or (ii) the body corporate is – or a majority
within four months of the offer by the holders of of its directors are – accustomed to, or is/
no less than 90% of the total number of shares are under an obligation – whether formal
involved in the transfer. or informal –to act in accordance with, the
directions, instructions or wishes of the
On 1 July 2023, the criteria for computing the offeror or excluded persons.
90% threshold requirement were revised to
expand the scope of shareholders whose shares 6.9 Requirement to Have Certain Funds/
will be excluded from the computation. The Financing to Launch a Takeover Offer
scope of exclusion now covers the following. Private Takeovers
For private takeovers, a financing condition is
• Any shares held as treasury shares. subject to negotiations between the buyer and
• Those shares already held at the date of the the seller; however, it is not typically included in
offer by: transaction documentation.
(a) the offeror (or the offeror’s related corpo-
rations); Public Takeovers
(b) a nominee of the offeror (or its related For public takeovers, the firm intention to under-
corporations); take an offer requires an unconditional confir-
(c) a person who is accustomed or is under mation by the buyer’s financial adviser (or by
an obligation, whether formal or informal, another appropriate third party) that the buyer
to act in accordance with the directions, has sufficient resources available to satisfy full
instructions or wishes of the offeror in acceptance of the offer. As such, an offer cannot
respect of the target company; be conditional upon the buyer obtaining financ-
(d) the offeror’s spouse, parent, brother, sis- ing, and provisions for “certain funds” will be
ter, son, adopted son, stepson, daughter, included in financing documents entered into in
adopted daughter or stepdaughter; connection with the offer.
(e) a person whose directions, instructions
or wishes the offeror is accustomed to, 6.10 Types of Deal Protection Measures
or is under an obligation – whether formal Deal protection measures in private takeovers
or informal – to act in accordance with, in are a matter of negotiation between the buyer
respect of the target company; or and the counterparty.
(f) a body corporate that is “controlled” by
the offeror or a person mentioned in para- Where the Takeover Code applies, the target
graphs (c), (d) or (e) of this list (“excluded company’s duty under the Takeover Code is to

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not undertake any deal protection mechanism 6.11 Additional Governance Rights
without the shareholders’ approval if such mech- In the context of a public takeover offer, no
anism could effectively result in any bona fide additional rights are granted to a shareholder by
offer being frustrated or the target’s sharehold- reason of a significant shareholding. A bidder
ers being denied an opportunity to decide on the may seek to nominate and vote for its preferred
offer’s merits. directors of the target company’s board, subject
to the directors having the appropriate qualifica-
That being said, the Takeover Code does allow tions required under listing rules and other appli-
for deal protection measures such as break cable laws and regulations.
fees to be negotiated and paid if certain speci-
fied events occur; however, the SIC will need 6.12 Irrevocable Commitments
to approve the break-fee provisions. The break In the context of a scheme of arrangement, it
fee must comply with the safeguard provisions is not uncommon to obtain irrevocable com-
under the Takeover Code, such as the following. mitments from the target company’s significant
shareholders to accept (or vote in favour of) the
• A break fee must be minimal (normally no offer in order to enhance deal certainty.
more than 1% of the value of the target com-
pany, calculated based on the offer price). It is possible for such undertakings to specify
• The board of the target company and its circumstances that then cease to be binding –
financial adviser must provide the SIC with: for example, where a better offer is made and
(a) an explanation of the basis on and the it is a matter of negotiation between the signifi-
circumstances in which the break fee cant shareholder and the bidder. The irrevocable
becomes payable; and commitment must be disclosed at the time of the
(b) written confirmations that, inter alia (i) the offer announcement and will need to be made
break fee arrangements were agreed as a available for inspection.
result of normal commercial negotiations;
(ii) all other agreements or understand- 6.13 Securities Regulator’s or Stock
ings in relation to the break-fee arrange- Exchange Process
ments have been fully disclosed; and (iii) Whether the offer needs to be approved by the
they each believe the fee to be in the best SIC or the SGX will depend on the nature and
interests of the target company. structure of the takeover offer. Consultation and/
or approval must be sought from the SIC prior to
Other deal protection mechanisms (eg, non- the takeover offer’s launch in certain situations
solicitation provisions) may be possible and are specified in the Takeover Code, including:
more commonly seen in public takeovers involv-
ing schemes of arrangements where the target • where the offer will be carried out by way of a
company’s board is: scheme of arrangement;
• where the offer has unusual conditions or is
• supportive of the buyer’s offer; and conditional on a high level of acceptance;
• prepared to convene a scheme meeting in • where there are special deal arrangements
order to table the buyer’s offer. that benefit certain shareholders but not oth-
ers; and

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• where the review period depends on the way of a scheme of arrangement, a trust scheme
nature and complexity of the transaction in or an amalgamation, the aforementioned dead-
question. line for the potential competing offeror to clarify
its intention would normally be no later than
Normal conditions – for example, level of accept- seven days before the shareholders’ meeting to
ance, approval of shareholders for the issue of approve the relevant scheme or amalgamation.
new shares and the SGX’s approval for listing
– may be attached without reference to the SIC. Consequently, the timeline of the offer may be
As mentioned in 6.5 Common Conditions for extended as well. If a competitive situation still
a Takeover Offer/Tender Offer, conditions that exists at a later stage of the offer process – and
can only be fulfilled based on the subjective if no procedure has been agreed between the
interpretation or judgment of the bidder – or that competing offerors, the board of the target com-
lie, in the bidder’s hands – will not be allowed. pany and the SIC – an auction procedure, as
prescribed in the Takeover Code, would typically
The Takeover Code prescribes certain timelines be announced.
for an offer. The following represents a typical
timetable. 6.14 Timing of the Takeover Offer
If regulatory approvals are required as part of a
• From the date of an announcement of an offer takeover offer, they would typically be obtained
(“T”), the earliest date that the offeror can prior to the firm intention to make the offer –
post the offer document (a requirement under given that there could be uncertainty surround-
the Takeover Code) is T + 14 days (and no ing whether the regulatory approvals may be
later than T + 21). obtained within the offer timetable. A bidder
• Assuming the offer document was posted can announce a pre-conditional offer if the
on T + 14 days, the offer must be open for at announcement of a firm intention to make an
least T + 42 days – given that an offer must offer is subject to the fulfilment of certain regu-
be open for at least 28 days following the latory pre-conditions. The announcement must
date on which the offer document is posted. specify a reasonable period in which the pre-
• An offer would usually be closed on T + 74 conditions must be fulfilled or, failing which, the
days because an offer cannot be kept open offer will lapse.
for more than 60 days following the date on
which the offer document is posted – unless The Takeover Code prescribes specific situ-
the offer has previously become uncondition- ations in which pre-clearance from the CCCS
al as regards acceptance. would be required with regard to competition
laws. The offer would lapse in certain situations
In a competitive offer, the competing offeror if approval from the CCCS is not obtained.
must either announce a firm intention to make
an offer or make a “no intention to bid” state-
ment within 53 days of the date on which the first
offeror posted its initial offer document (ie, T +
67 using the above-mentioned timetable). Where
the first offeror’s offer is being implemented by

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7. Overview of Regulatory Competition law concerns relating to the Com-

Requirements petition Act 2004 of Singapore are regulated by
the CCCS, and the MAS administers the Secu-
7.1 Regulations Applicable to a rities and Futures Act 2001 of Singapore (the
Technology Company “Securities and Futures Act”).
There are generally no requirements to incorpo-
rate and operate a technology company. How- Furthermore, depending on the industry in
ever, licensing requirements would be relevant if which the target company operates, it may be
the company is involved in specified industries. necessary to obtain the approval of the relevant
government agencies – given that statutes may
Some of the more common industries and rel- limit or require prior regulatory approval for share
evant regulatory bodies that companies in the ownership in certain regulated companies (eg,
technology sector typically encounter are: those in the insurance, media, banking and
finance industries).
• financial services (including electronic money
(or e-money), account issuance money trans- 7.3 Restrictions on Foreign Investments
fer, digital payment tokens, money-changing There are generally no restrictions on foreign
and capital markets services) – MAS; investment – except in certain regulated sectors
• insurance (including direct insurance, reinsur- (see 7.1 Regulations Applicable to a Technol-
ance, general insurance and insurance brok- ogy Company) – that limit or require prior regu-
ing) – MAS; latory approval for control or share ownership
• telecommunications (including internet in regulated companies, especially where these
access, mobile networks and web hosting) – companies are critical to national interests.
Infocomm Media Development Authority;
• broadcasting – Infocomm Media Develop- There is generally no requirement to register or
ment Authority; report:
• food and agriculture – Singapore Food
Agency (SFA); and • the investment of foreign capital;
• life sciences and healthcare – HSA. • foreign loans; or
• foreign technology agreements.
The length of time needed to obtain a licence
varies widely across the various regulatory bod- 7.4 National Security Review/Export
ies and depends on the nature of the licence Control
sought. The Significant Investments Review Act 2024
(SIRA) and its related subsidiary legislation, the
7.2 Primary Securities Market Regulators Significant Investments Review Regulations
The SIC is the regulator that supervises takeo- 2024 and the Significant Investments Review
vers and mergers of public companies, as well (Reviewing Tribunal) Rules 2024, came into force
as the Takeover Code. The SGX administers the on 28 March 2024. SIRA sets out a new invest-
listing rules applicable to public companies. ment regime to regulate significant investments,
both local and foreign, into entities that are criti-
cal to Singapore’s national security interests.

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As of 31 May 2024, the Minister for Trade and in a substantial lessening of competition (SLC)
Industry (the “Minister”) has identified and des- within any market in Singapore. As a guide, the
ignated nine entities as critical to Singapore’s CCCS considers that an SLC is unlikely to arise
national security interests, which must notify or post-merger unless:
seek approval from the authorities for ownership
or control changes, among other changes. Fur- • the “merged entity” has a market share of
ther, the Minister now has “calling-in” powers 40% or more; or
to review transactions, within a two-year peri- • the “merged entity” has a market share of
od, involving an entity that was not designated more than 20%, and the post-merger com-
as critical but has acted against Singapore’s bined market share of the three largest firms
national security interests. The authors’ view is (CR3) in the market(s) is 70% or more.
that the government is unlikely to expand this
list without careful consideration of the impact Antitrust Filing Requirements
that enhanced regulatory controls might have on Antitrust filings in takeover offers/business com-
tech M&A investments. binations in Singapore are voluntary, as Singa-
pore has adopted a voluntary merger regime.
SIRA notwithstanding, general sectoral-based Although Singapore has a voluntary regime, the
regulatory and licensing approvals continue to CCCS takes a strict stance and, where the indic-
remain in place. Certain licences incorporate a ative thresholds are crossed or at the borderline,
licence review and approval process where there it strongly recommends (or even mandates) that
is a change in control or ownership. The licens- a notification is made or else the CCCS may
ing authorities involved depend on the nature investigate the merger. The CCCS has done so
of the business conducted, and these include on several occasions in the past.
the Monetary Authority of Singapore (MAS), Info-
communications Media Development Author- Guidelines on the Competition Act
ity (IMDA), HSA, SFA, Energy Market Authority The CCCS has published guidelines that outline
(EMA), Hotels Licensing Board (HLB), Civil Avia- the conceptual, analytical and procedural frame-
tion Authority of Singapore (CAAS), Land Trans- work applied by the CCCS when administering
port Authority (LTA), Maritime and Port Authority and enforcing the Competition Act in Singapore.
of Singapore (MPA), National Environment Agen-
cy (NEA), Singapore Medical Council (SMC) and Two key sets of changes that are particularly rel-
Legal Services Regulatory Authority (LSRA). evant were those made to the CCCS Guidelines
on the Substantive Assessment of Mergers and
Apart from general obligations relating to inter- the CCCS Guidelines on Merger Procedures.
national sanctions laws and other international
obligations, there are generally no export control The CCCS Guidelines on the Substantive
regulations. Assessment of Mergers sets out the analytical
framework that the CCCS applies when assess-
7.5 Antitrust Regulations ing M&A and are intended to aid parties in con-
The relevant provision under the Competition ducting a self-assessment.
Act is Section 54, which prohibits mergers that
have resulted – or may be expected to result –

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The CCCS Guidelines on Merger Procedures The TMS Code

sets out a description of the CCCS’ procedures The Infocomm Media Development Authority of
when applying the Competition Act to mergers Singapore (IMDA) issued the Code of Practice
and include, inter alia: for Competition in the Provision of Telecom-
munication and Media Services (the “TMS
• an overview of the procedural framework Code”), which took effect on 2 May 2022. The
adopted by the CCCS; M&A provisions found in Section 10 of the TMS
• self-assessment guidance for parties; Code require parties seeking to enter into M&A
• a detailed account of how parties can make transactions to submit requests or consolidation
an application to CCCS for a decision regard- applications in certain defined situations. Where
ing a merger situation; the IMDA concludes that a proposed request or
• remedies that may be implemented by CCCS; consolidation is likely to result in an SLC or is
and against the public interest, the IMDA will:
• exclusions and exemptions to the Section 54
prohibition. • reject the request or consolidation applica-
tion; or
Parties to a merger or acquisition are encour- • impose appropriate conditions.
aged to refer to the guidelines and conduct a
self-assessment prior to completion of an M&A 7.6 Labour Law Regulations
transaction. Buyers involved in the acquisition of a business
undertaking (as opposed to a share transaction)
CCCS Investigation should note that the Employment Act 1968 of
If an investigation by the CCCS determines Singapore provides the following.
that the merger results in an SLC, the CCCS
may impose on the parties any direction that it • All the seller’s rights, powers, duties and
believes will bring this infringement to an end, liabilities in connection with the affected
including orders to: employees are transferred to the buyer. As a
consequence, the buyer will become liable for
• divest part of the assets; all acts or omissions in respect of the employ-
• unwind the merger; and/or ee prior to the transfer. Likewise, the employ-
• financial penalties of up to 10% of the infring- ee will become liable to the buyer for any acts
ing parties’ turnover in Singapore for the and omissions committed by them in respect
period of the infringement (up to a maximum of the seller prior to the transfer. However, the
of three years). liability of any person for having committed
a criminal offence prior to the transfer is not
The CCCS may also issue interim measures as affected by – and does not transfer as a result
it investigates a merger, including a direction of – these provisions.
preventing the parties from implementing their • There must be no break in employment dur-
proposed merger. ing the transfer, and the past years of service
with the seller need to be recognised by the
buyer for the purposes of calculating any

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compensation or benefits linked to the dura- Where the target company has a unionised
tion of service. workforce, it would be prudent to analyse the
• The terms and conditions of service for the union agreement in order to assess the impact
employee will be the same as those enjoyed of the transaction thereon.
by them immediately prior to the transfer,
but this does not preclude the buyer and the In transactions where there are intentions to
affected employees from negotiating changes make employees redundant, the retrenchment
to their contracts. If new terms are proposed process should be carefully managed in line
by the buyer for the purposes of harmonisa- with guidance from the Singapore Ministry of
tion with other local employees, then the Manpower (MOM) to minimise the impact on
compensation and benefits offered must – on the future operations of the target company.
balance – be no less favourable than the It is mandatory for employers with at least ten
terms of employment prior to the transfer. employees to notify the MOM of the retrench-
ment of any employee.
Due Diligence
Given the transfer of liability to the buyer, it Foreign Employees
is imperative that due diligence in respect of Post-acquisition, buyers should also be aware of
employment matters is conducted thoroughly the regulations concerning the hiring of foreign
in order to uncover any related liabilities, and employees. There are specific quotas and lev-
that appropriate indemnities are extracted from ies for the hiring of certain categories of work
the seller where necessary. permit-holders (ie, semi-skilled migrant work-
ers), which vary depending on the industry sec-
Duties to Employees and Their Union tor involved.
The affected employees and their union must be
informed of the impending transfer of employ- While the hiring of those who hold employment
ment within a reasonable time prior to the trans- passes (generally professionals, managers and
fer of the business undertaking – unless the time- executives) is not subject to any specific quotas,
frame for the consultation process is otherwise businesses are expected to implement fair and
stipulated in the existing collective agreement progressive workplace policies and maintain a
between the union and the seller. healthy balance of both local and foreign hires.

As a baseline, the buyer must notify the employ- As of 2024, the MOM has expressly stated that
ees and the trade union (if any) of: non-Singapore entities wanting to engage an
individual in Singapore who is not a Singapore
• the transfer; national or permanent resident may no longer
• the approximate date on which it is to take engage an employer of record (EOR) to sponsor
place; the individual for a work permit. Such a change
• the reasons for the transfer; indicates that non-Singaporean entities will have
• the implications of the transfer; and to venture into other options when employing
• the measures to be taken by the seller and and sponsoring foreign talent.
the buyer (if no measures will be taken, this
must be stated).

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7.7 Currency Control/Central Bank of such SCS must meet key requirements, as
Approval follows:
There are no foreign exchange or currency
restrictions in Singapore, and no central bank • value stability – SCS reserve assets must
approval is required for M&A transactions. follow rules on their composition, valuation,
custody and audit to ensure a high level of
value stability;
8. Recent Legal Developments • capital – issuers must have minimum base
capital and liquid assets to lower the risk of
8.1 Significant Court Decisions or Legal insolvency and enable a smooth exit of busi-
Developments ness if needed;
For the first three quarters of 2024, Singapore • redemption at par – issuers must give back
saw an aggregate SGD66 billion of M&A deals the par value of SCS to holders within five
involving Singapore companies, almost 30% business days from a redemption request;
higher than in the same period in 2023. The and
aggregated value of Singapore tech M&A trans- • disclosure – issuers must provide suitable
actions from Q1 to Q3 in 2024 remained stable disclosures to users, including information on
year-on-year, despite a 13% volume decrease how the SCS value is stabilised, the rights of
from that of 2023. The technology sector saw SCS holders and the audit results of reserve
the highest overall number of deals, with an assets.
aggregate value of USD3.6 billion, representing
approximately 10% of the market share. Only stablecoin issuers that meet all the require-
ments under the framework can ask MAS for
Notable technology-related deals include a con- their stablecoins to be recognised and labelled
sortium by Singtel and KKR to invest SGD1.75 as “MAS-regulated stablecoins”. This label will
billion in ST Telemedia Global Data Centres, help users to easily distinguish MAS-regulated
being South-East Asia’s largest digital infrastruc- stablecoins from other digital payment tokens,
ture investment in 2024. including “stablecoins” that are not covered by
MAS’ stablecoin regulatory framework.
New Stablecoin Regulatory Framework
The MAS revealed the details of a new regulatory
framework in August 2023, which aims to ensure 9. Due Diligence/Data Privacy
that stablecoins regulated in Singapore have a
high level of value stability. The new framework 9.1 Technology Company Due Diligence
reflects the feedback that was received after a It is up to the directors of the target company
public consultation in October 2022. to allow any disclosure regarding the conduct
of due diligence, based on their duty to act in
MAS has a stablecoin regulatory framework that the best interests of the target company. The
covers single-currency stablecoins (SCS) that level of information and documents provided will
are linked to the Singapore dollar, or any G10 depend on the nature of the transaction and the
currency, and are issued in Singapore. Issuers due diligence process conducted.

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Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore

Disclosure Restrictions It is worth noting that the maximum financial pen-

Furthermore, any disclosure of information alties for data breaches by organisations have
during the due diligence process by the target been increased with effect from 1 October 2022.
company would be subject to the disclosure An organisation whose annual turnover in Singa-
restrictions set out in the Listing Manual of the pore exceeds SGD10 million now faces fines of
Singapore Exchange Securities Trading Limited up to 10% of its annual turnover in Singapore –
(SGX-ST) (the “Listing Manual”) and a target or, in any other case, up to SGD1 million. Given
company’s continuing disclosure requirements. that organisations could face such substantial
The target company would also have to ensure penalties, it is crucial that they ensure compli-
that this did not raise insider dealing concerns ance with data protection laws when conducting
under the Securities and Futures Act. However, due diligence.
price-sensitive information (including forward-
looking statements or projections) will not typi- On 18 July 2022, the Personal Data Protection
cally be produced as part of the due diligence Commission launched the Guide on Personal
exercise – unless the target company is willing Data Protection Considerations for Blockchain
to disclose such information publicly prior to the Design to help organisations with blockchain
completion of the transaction in question. adoption, setting out principles and considera-
tions on complying with the PDPA when deploy-
Sharing of Information ing blockchain applications that process per-
If there is a competing bid, the Takeover Code sonal data.
requires that any information given to one bid-
der must be provided equally and promptly to In October 2022, the Singapore Exchange Regu-
any other bona fide bidder, if the other bidder lation (SGX RegCo) published the Cyber Incident
requests such information. Response Guide to provide guidance on the best
practices, which are pertinent to helping issu-
9.2 Data Privacy ers listed on the Singapore Exchange Securities
The data protection laws of Singapore (com- Trading Limited as well as the SGX members
prising the Personal Data Protection Act 2012 strengthen their cyber-risk management strate-
(PDPA) and other industry-specific regulatory gies and practices. The Guide aims to set out
frameworks such as the Banking Act 1970 of considerations and good practices for compa-
Singapore and the Insurance Act 1966 of Sin- nies to refer to in preparing and operationalising
gapore) generally prohibit the disclosure of per- their own cyber incident response plans, and to
sonal data without consent. However, the PDPA adapt these considerations and good practices
contains an exception that allows for disclosure as necessary to meet their own requirements.
of personal data solely for purposes related to a
business asset transaction. This so-called “busi- In March 2024, the Personal Data Protection
ness asset transaction” exception is defined Commission published the Advisory Guidelines
widely to include both share and business/ on Use of Personal Data in AI Recommendation
asset acquisitions and mergers and amalgama- and Decisions Systems, the purpose of which
tions; nonetheless, it is subject to limitations and is to clarify how the PDPA applies to the col-
imposes certain obligations on both the potential lection and use of personal data by organisa-
buyer and seller. tions to develop and deploy systems that embed

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SINGAPORE Law and Practice
Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore

machine learning models, which are used to under the Takeover Code, including in the fol-
make decisions autonomously or to assist a lowing situations:
human decision-maker through recommenda-
tions and predictions. • when it receives notification of a firm intention
to make an offer from a serious source;
• when, following an approach to the target
10. Disclosure company, it is the subject of rumour and
speculation about a possible offer, or there
10.1 Making a Bid Public is undue movement in its share price or a
The Takeover Code requires absolute secrecy significant increase in the volume of share
before an announcement of a takeover offer is turnover (regardless of whether or not there is
made. Information relating to a bid should only a firm intention to make an offer);
be passed to another person when it is neces- • when negotiations or discussions between
sary to do so, and that person should be made the bidder and the target company are about
aware of the need for secrecy. A list containing to be extended to include more than a very
persons privy to the information will need to be restricted number of people; or
maintained and provided to the SGX on request. • when it is aware of negotiations or discus-
sions between a potential bidder and the
As mentioned in 6.1 Stakebuilding, where there shareholders holding 30% or more of the
are reasonable grounds to suspect that its voting rights of the target company – or when
actions have contributed in some way, the buyer the target company’s board is seeking poten-
has an obligation (under the Takeover Code) to tial bidders – and (i) the target company is
report to the SGX if, before the target company’s the subject of rumour and speculation about
board is approached: a possible offer, or there is undue movement
in its share price or a significant increase in
• the target company is the subject of rumour the volume of share turnover; or (ii) more than
or speculation about a possible offer; or a very restricted number of potential bidders
• there is undue movement in its share price or are about to be approached.
a significant increase in the volume of share
turnover. 10.2 Prospectus Requirements
Generally, a prospectus is not required for a
Where the offeror makes an acquisition of shares takeover made in accordance with the Takeover
that gives rise to a mandatory offer under the Code.
Takeover Code, the offeror should also make an
announcement to the SGX. There is no requirement for the listing of the buy-
er’s shares on a specified exchange, either local
Once the potential offeror has approached the or overseas. The buyer’s shares can also be in
board of the target company, the obligation to an unlisted company. However, under the Takeo-
make the announcement to the SGX lies primar- ver Code, certain offers are required to have a
ily with the target company. The target company cash alternative or to be in cash only. The List-
has an obligation to make an announcement ing Manual also requires a cash alternative to be

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SINGAPORE Law and Practice
Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore

the default alternative, provided that the target is duties under the Companies Act. Generally,
seeking to delist from the SGX. under Singapore law, directors’ duties are to act
in good faith and in the best interests of the com-
10.3 Producing Financial Statements pany. In addition, the Companies Act provides
Under the Takeover Code, the offer document that directors should consider:
must contain specified information on the offeror
– regardless of whether the offer consideration • the interests of the company’s employees
is in cash or stock. This information includes: generally;
• the interests of its members; and
• details of turnover; • the rulings of the SIC on the interpretation of
• exceptional items; the Takeover Code’s principles and rules.
• net profit or loss before and after tax;
• minority interests; Duties Under the Takeover Code
• net earnings per share and net dividends per Directors have an obligation under the Takeover
share; and Code to ensure compliance with the code. Every
• a statement of the assets and liabilities director of the target company has an obligation
shown in the most recent published audited to fulfil their duties under the Takeover Code,
accounts. even if conducting the offer is delegated to indi-
vidual directors or a committee of directors.
In a stock-for-stock transaction (or securities
exchange offer), additional information relating As mentioned in 6.10 Types of Deal Protection
to the offeror’s shareholdings will need to be Measures, under the Takeover Code, the board
included in the offer document. of the target company must not take any action
that could result in:
Public companies are required to adopt the Sin-
gapore Financial Reporting Standards (Interna- • any offer being frustrated; and
tional), which are Singapore’s equivalent of the • the shareholders of the target company being
International Financial Reporting Standards. denied an opportunity to decide on the merits
of the offer.
10.4 Disclosure of Transaction
Documents Furthermore, directors have a duty to obtain
Copies of all public announcements and all doc- competent advice on any offer and make such
uments that have a bearing on a public takeover advice known to their shareholders.
transaction must be lodged with the SIC at the
time when they are made or dispatched. 11.2 Special or Ad Hoc Committees
Although it is common for the executive directors
of the target company to take a more active role
11. Duties of Directors in managing the takeover process, all directors
have an obligation to ensure compliance with the
11.1 Principal Directors’ Duties Takeover Code during the process. Although it is
In a business combination, directors have fidu- not necessary for boards to establish special or
ciary duties under common law and statutory ad hoc committees in order to address conflict-

27 CHAMBERS.COM
SINGAPORE Law and Practice
Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore

of-interest issues, it is becoming increasingly adviser appointed to advise on the offer. How-
common – especially in the case of management ever, shareholder activism has been on the rise
buyouts. in recent times when it comes to takeovers of
public companies.
Furthermore, the board is allowed to delegate
the day-to-day conduct of an offer to a commit- 11.4 Independent Outside Advice
tee; however, it must continue to take respon- The board of a Singapore-incorporated buyer
sibility for every document, advertisement or must obtain competent independent advice on
announcement that the target company pub- any offer, and the essence of such must be made
lishes in relation to an offer. Directors who have known to its shareholders. Furthermore, the
an irreconcilable conflict of interests may be Listing Manual provides that – where the target
exempted by the SIC from making recommen- company is seeking to delist from the SGX – the
dations to shareholders but must still assume issuer must appoint an independent financial
responsibility for every document, advertise- adviser to:
ment or announcement that is published by the
target company in relation to an offer. • advise on the exit offer; and
• assess whether the exit offer is fair and rea-
11.3 Board’s Role sonable.
Depending on the structure of the transaction
(and whether the offer is an unsolicited offer), the The target company must issue a circular for the
board of a target company may not necessarily shareholders’ consideration, in which the follow-
be involved in negotiating a takeover offer. Apart ing are published:
from schemes of arrangement, target companies
in Singapore do not typically enter into imple- • the analysis of the independent financial
mentation agreements or conduct bid agree- adviser;
ments for takeover offers. • the opinion of the financial adviser on the
offer; and
However, as mentioned in 6.10 Types of Deal • the recommendations of the directors who
Protection Measures, the Takeover Code does are considered independent for the purposes
specifically provide that the board of the target of the offer.
company may solicit for a competing offer or run
a sale process – given that a better offer is in the On 3 July 2023, SGX RegCo issued the Guide-
interests of the target company’s shareholders lines on Independent Financial Adviser s and an
and would still allow shareholders to consider accompanying “regulator’s column” setting out
the merits of the first offer. SGX RegCo’s expectations and guidance for
independent financial advisers and their opin-
It is not common for shareholders in a target ions, as well as the role and expectations for
company to challenge the recommendation of directors in procuring an opinion from independ-
its directors with regard to the advice and rec- ent financial advisers, in the context of the SGX
ommendations of the independent financial listing rules.

28 CHAMBERS.COM
SINGAPORE Trends and Developments

Trends and Developments

Contributed by:
Terence Quek, Benjamin Cheong, Favian Tan and Rajesh Sreenivasan
Rajah & Tann Singapore

Rajah & Tann Singapore is a leading full-ser- and e-commerce. The team is highly adept at
vice law firm and member of Rajah & Tann Asia, providing practical advice on complex issues
which is one of the largest regional networks that often arise in tech M&A transactions – from
and has more than 1,000 fee-earners. With a conducting IP and cybersecurity due diligence
thriving tech M&A practice representing inves- to drafting transitional service agreements and
tors and enterprises involved in all facets of the invention assignment agreements and design-
data and digital economy, the team has acted ing data protection policies. The firm has of-
frequently in acquisitions/divestments and in- fices in Cambodia, China, Indonesia, Lao PDR,
vestments into growth-stage companies oper- Malaysia, Myanmar, Thailand, Vietnam and the
ating in blockchain, cryptocurrency, agrifood Philippines, and dedicated desks focusing on
tech, fintech, deep tech, legal tech and med- Brunei, Japan and South Asia.
tech, in addition to social networking, gaming

Authors
Terence Quek is the deputy Benjamin Cheong is the deputy
head of Rajah & Tann head of Rajah & Tann’s TMT
Singapore’s M&A practice, with practice. Throughout his career,
more than 22 years of he has successfully served
experience in M&A, private clients across a wide range of
equity/venture capital deals, industries including IT, media,
local and cross-border joint ventures, hospitality, telecommunications,
corporate restructurings, corporate rescues semiconductors, life sciences, financial
and general commercial law. He has advised services, and insurance. Benjamin’s expertise
on the sale and purchase of companies, extends to cross-border joint ventures,
undertakings and businesses in almost every mergers and acquisitions, and technology
sector of industry, including technology, outsourcing deals. He possesses a deep
banking, insurance, manufacturing, understanding of the legal issues surrounding
pharmaceuticals, property development and emerging technologies such as blockchain and
healthcare. Terence is also actively involved in AI, enabling him to lead these transactions
a wide spectrum of investment transactions on effectively. Benjamin’s ability to keep pace with
both the buy and sell sides, ranging from seed the latest technological trends also allows him
financing to early-stage investments to growth to offer comprehensive and informed
capital, as well as exits, and joint venture deals representation and advice on deals involving
involving both local and cross-border entities. cutting-edge technology.

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Contributed by: Terence Quek, Benjamin Cheong, Favian Tan and Rajesh Sreenivasan, Rajah & Tann Singapore

Favian Tan is a partner at Rajah Rajesh Sreenivasan is the head

& Tann Singapore who of Rajah & Tann Singapore LLP’s
specialises in M&A and has TMT practice and co-ordinating
more than a decade of partner for its multidisciplinary
experience working on and cross-practice data and
significant M&A transactions digital economy regional sector
involving private and public listed companies, group. He is also the director and co-founder
REITs and business trusts. His main practice of Rajah & Tann Technologies and Rajah &
areas encompass share and asset acquisitions Tann Cybersecurity – the legal-tech arms of
and disposals, public takeovers and Rajah & Tann Asia. With more than 20 years of
privatisations, REIT mergers, joint ventures and practice, Rajesh has been universally
private equity and venture capital investments, recognised as the region’s leading TMT lawyer
as well as advising on general corporate and and is at the forefront of matters relating to
commercial matters. He also routinely advises technology procurement, AI, cybersecurity,
clients on joint ventures, with a recent focus on data protection, analytics and governance,
sustainability and technology-related joint telecommunications, e-commerce, cloud
ventures. computing, distributed ledger technologies,
digital forensics and digital media.

Rajah & Tann Singapore

9 Straits View #06-07
Marina One West Tower
Singapore 018937

Tel: +65 6535 3600

Email: [email protected]
Web: sg.rajahtannasia.com

30 CHAMBERS.COM
SINGAPORE Trends and Developments
Contributed by: Terence Quek, Benjamin Cheong, Favian Tan and Rajesh Sreenivasan, Rajah & Tann Singapore

Tech M&A in Singapore: An Overview of the value, the TMT sector also maintained its leading
Current Landscape position in deal value by contributing USD50.6
According to a PwC report, the global mergers billion in the first half of 2024. Buyers originate
and acquisitions (M&A) landscape experienced primarily from China, India, the United States,
a decline in both volume and value during the Japan and South Korea.
first half of 2024. Specifically, M&A volume fell
by around 14%, while M&A value decreased by In January 2024, SentinelOne, Inc, an American
1% compared to the already-low levels seen cybersecurity company, acquired Pingsafe Pte
in the second half of 2023. When comparing Ltd, a Singapore-based cloud-native applica-
these figures to the first half of 2023, M&A vol- tion protection platform company, along with its
ume dropped by around 25% while M&A value Indian and United States subsidiaries, in a trans-
increased slightly, by around 5%. action valued at over USD100 million.

In the first half of 2024, the technology, media In June 2024, a consortium comprising Kohlberg
and telecommunications (TMT) sector emerged Kravis Roberts & Co LP (KKR), an American
as the most active sector on the M&A front for investment firm, and Singapore Telecommunica-
deal-making, contributing to approximately 20% tions Limited (Singtel), a Singaporean telecom-
of deal volume and 27% of deal value in the first munications company, announced its intentions
half of 2024. to acquire a USD1.75 billion stake in a Singa-
pore-based data centre provider, STT GDC Pte
Closer to home, according to a report by Data- Ltd. To date (7 November 2024), KKR-Singtel’s
site, M&A activity in the proposed acquisition marks the largest digital
infrastructure investment in South-East Asia
Asia-Pacific (APAC) region remained subdued in (SEA) in 2024.
the first half of 2024. There was a total of 4,564
transactions announced during this period, Additionally, in August 2024, EQT Private Capi-
representing a 11.5% decline compared to the tal Asia, a Hong Kong-based privacy equity
same period in 2023. firm, announced its acquisition of PropertyGuru
Group Limited (PropertyGuru), a Singapore-
The total deal value announced in the APAC based property technology platform company,
region also experienced a significant decline, in an all-cash transaction valued at USD1.1 bil-
falling by 24.6% year-on-year: from USD381 bil- lion. The deal will take PropertyGuru private and
lion in the first half of 2023 to USD288 billion in off the New York Stock Exchange.
the first half of 2024. Only three megadeals were
recorded in the first half of 2024. A combination of factors has contributed to the
challenging environment for M&A, both globally
According to Datasite, the TMT sector has and within the APAC region, in the first half of
maintained the highest number of deals in the 2024. Some of these factors include the follow-
first half of 2024, with 1,287 deals announced ing.
in the APAC region. However, this represents a
year-on-year decline of 10.5% in deal volume. • High interest rates – elevated interest rates
Despite a 21.4% year-on-year decline in deal can increase the cost of borrowing for M&A

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transactions, making them less attractive for and financial technology, in shaping Singapore’s
investors. High-interest rates can also affect economic landscape.
the valuation of target companies.
• Capital constraints – access to capital is The Infocomm Media Development Authority
crucial for M&A activity, and constraints in the (IMDA) reported that Singapore’s digital econ-
availability of financing can limit deal-making omy has been growing at an impressive com-
opportunities. pound annual growth rate of 11.2% from 2018
• Geopolitical tensions – geopolitical uncertain- to 2023, which is almost two times the rate of
ties and tensions can create a riskier environ- Singapore’s nominal GDP growth. This trend
ment for cross-border M&A deals, leading to underscores the accelerating pace at which the
hesitation among potential investors. digital sector is evolving and outpacing tradi-
• Regulatory scrutiny – increasing regula- tional sectors of the economy. The rapid growth
tory scrutiny, especially in sectors related to of the digital economy in Singapore is expected
national security and sensitive technologies, to drive M&A activity, domestically and in the
can complicate and delay M&A transactions. broader SEA region, in the months to come.
• China – the lacklustre post-pandemic eco-
nomic recovery in China, marked by reduced Geopolitical strife and a “super year” of
consumer spending and a record-high youth elections
unemployment rate, has had a notable impact This year, the world has grappled with significant
on the APAC region’s M&A activity. geopolitical challenges, including the ongoing
Russo-Ukrainian conflict, escalating conflicts
While M&A activity in the TMT sector remained in the Middle East, and growing trade tensions
low in the first half of 2024, market conditions between the United States and China. In addi-
have noticeably improved in the second half of tion, 2024 has been defined by political upheaval
2024. In September 2024, the United States Fed- across the globe. This year is widely regarded
eral Reserve lowered interest rates for the first as a “super year” of elections, with half of the
time in four years, which alleviated recession- world’s population set to vote in domestic elec-
ary concerns and enabled buyers with pent-up tions across 72 countries.
demand like private equity firms to re-enter the
market. As other central banks follow the lead Political transitions often lead to shifts in regula-
of the Federal Reserve, investor confidence has tory priorities and policies, which can engender
returned. Singapore has seen a marked increase opportunities and uncertainties in deal-making.
in M&A activity in the second half of 2024, and Election outcomes in territories like the United
more deals in the TMT sector are on the horizon. States, the European Union, Japan, India and
the United Kingdom could also reshape the
In 2023, Singapore’s digital economy reached a global political and economic landscape. These
new milestone, contributing SGD113 billion to political developments have increased mar-
Singapore’s total economic output and compris- ket volatility and given rise to a complex and
ing 17.7% of Singapore’s gross domestic prod- unpredictable deal-making environment, foster-
uct (GDP). These figures reflect the growing sig- ing a heightened sense of risk among investors.
nificance of digital technologies, such as artificial Hence, investors have exercised more caution
intelligence (AI), cloud computing, e-commerce in the first half of 2024, leading to a decline in

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Contributed by: Terence Quek, Benjamin Cheong, Favian Tan and Rajesh Sreenivasan, Rajah & Tann Singapore

M&A activity in the TMT sector both globally and students with access to overseas internships in
regionally. Despite the resilience of Singapore’s AI-related roles and increase the number of SG
economy, Singapore remains a small state with Digital scholarships for students at the under-
an open economy, and it is not entirely insulated graduate, masters and PhD levels.
from the crosswinds caused by a challenging
global environment. The Singapore government’s policies are strate-
gically crafted to drive AI investment and adop-
Singapore’s investment in AI tion across various industries, with the aim of
To ensure the continued competitiveness and fostering a robust AI ecosystem that supports
leadership of Singapore in the global digital business innovation and economic growth.
landscape, the Singapore government unveiled These policies are expected to strengthen Sin-
Singapore’s National AI Strategy 2.0 (NAIS 2.0) gapore’s AI industry, positioning it as a signifi-
in December 2023. The new strategy broadens cant contributor to Singapore’s economy over
the scope of Singapore’s first National AI Strat- the coming years. As the AI sector in Singapore
egy, which focused on deploying AI use in spe- matures, Singapore is likely to see an increase
cific sectors, and aims to help Singapore har- in AI-related M&A activity as companies look to
ness AI’s full potential to drive economic growth, expand their AI capabilities, enter new markets
enhance the quality of life of Singaporeans and and enhance their technological edge. This trend
maintain Singapore’s position as a global AI hub. is anticipated to extend beyond Singapore and
The NAIS 2.0 is aligned with Singapore’s broader drive M&A activity across the region as busi-
digital transformation goals and its vision of a nesses increasingly recognise the value of inte-
Smart Nation, where AI plays a central role in grating AI into their strategic growth plans. By
various sectors such as healthcare, education, laying a solid foundation for AI innovation and
manufacturing, transport, financial services and investment, Singapore’s government aims not
biomedical services. only to strengthen the local economy, but also
to encourage both domestic and international
In Singapore’s 2024 National Budget, the Singa- businesses to invest in long-term AI ventures in
pore government unveiled an ambitious plan to Singapore.
invest SGD1 billion in AI development over the
next five years. Singapore intends to invest up Various guidelines and frameworks have also
to SGD500 million from the pool of AI funds to been put in place by Singapore regulators to
secure high-performance computing resources encourage the healthy and sustainable use of
to drive AI innovation and capability building. AI in their respective sectors. For example, in
This is because Singapore needs access to March 2024, Singapore’s Personal Data Protec-
robust compute infrastructure, such as graphics tion Commission (PDPC) also released the Advi-
processing units (GPUs), to support intensive AI sory Guidelines on the use of Personal Data in AI
workloads and engender an AI transformation. Recommendation and Decision Systems. These
To nurture AI talent in Singapore and triple Sin- guidelines aim to address the uncertainties busi-
gapore’s AI workforce to over 15,000 by 2029, nesses may face regarding the use of personal
the government will also set aside SGD20 mil- data in the development and deployment of AI
lion over the next three years for AI practitioner systems, which can otherwise hinder AI innova-
training for students. This funding will provide tion efforts. The guidelines shed light on when

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Contributed by: Terence Quek, Benjamin Cheong, Favian Tan and Rajesh Sreenivasan, Rajah & Tann Singapore

Singapore’s personal data protection legislation, businesses, these companies can mitigate the
the Personal Data Protection Act 2012, permits challenges of operating in a new regulatory
businesses to use personal data for AI innova- and cultural environment. Additionally, Singa-
tion. The PDPC’s initiative is expected to reduce pore’s role as a hub for Chinese companies may
uncertainty and compliance costs for business- attract interest from multinational corporations
es while facilitating greater AI innovation in Sin- and investment firms seeking M&A opportuni-
gapore. In June 2024, a consortium led by the ties in the region. These global players are likely
Monetary Authority of Singapore (MAS) released to acquire Chinese businesses headquartered
an open-source toolkit to enable its responsible in Singapore or listed on the SGX to tap into the
use in the financial industry. SEA market’s growth potential.

Chinese companies setting up regional The rise of climate technology and electric
headquarters in Singapore or listing on the vehicles
Singapore Exchange In April 2024, Breakthrough Energy (BE; a climate
Amid geopolitical tensions and regulatory organisation founded by Bill Gates), Temasek – a
uncertainties, an increasing number of Chinese Singapore-based global investment firm – and
companies are choosing to de-risk by estab- Enterprise Singapore (EnterpriseSG; a Singa-
lishing their regional headquarters in Singapore pore government agency supporting enterprise
or listing on the Singapore Exchange (SGX). growth) signed a memorandum of understand-
Singapore’s stable political environment and ing to launch Breakthrough Energy Fellows in
well-established financial ecosystem makes it South-East Asia (BE Fellows – SEA). The BE
an attractive base for Chinese firms seeking to Fellows programme is an initiative to support
mitigate risks associated with their home mar- entrepreneurs and accelerate the development
kets. This trend is particularly prevalent in the of early-stage, deep-tech climate technologies,
TMT sector, as the industry faces stricter regu- aimed at substantially reducing greenhouse gas
latory scrutiny and increasing trade challenges emissions and facilitating the achievement of
in both the United States and China. Setting up global net-zero targets. The BE Fellows – SEA
shop in Singapore not only provides Chinese programme will be based in Singapore and
companies with access to a robust legal and backed by joint funding over the next three
regulatory framework, but also positions them years.
closer to new growth markets in SEA. By list-
ing on the SGX, Chinese firms can demonstrate As the first BE Fellows hub outside the United
their commitment to robust corporate govern- States, the BE Fellows – SEA programme aims
ance measures and appeal to both regional and to foster start-up growth and support deep-tech
international investors. climate innovation in Singapore and the wider
SEA region. The BE Fellows – SEA programme
This trend is likely to drive an increase in M&A is likely to increase the number of Singapore-
activity within the TMT sector in Singapore. As based deep-tech climate startups working on
more Chinese firms enter the Singapore market, cutting-edge technologies like carbon capture in
they are likely to pursue acquisitions of local or the coming years. These startups could poten-
regional companies to accelerate their integra- tially increase M&A activity in the TMT sector in
tion and growth in SEA. By acquiring established SEA by attracting investment from investors who

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Contributed by: Terence Quek, Benjamin Cheong, Favian Tan and Rajesh Sreenivasan, Rajah & Tann Singapore

intend to expand their portfolios in sustainable pore gas provider City Energy teamed up with
technologies. a Malaysian company, Jom Charge, to launch
a cross-border EV charging network, enhancing
In addition, as part of Singapore’s Green Plan connectivity for such drivers in Singapore and
2030, the Singapore government has been Malaysia. Both startups and established com-
promoting the use of electric vehicles (EVs) to panies that focus on these technologies may
facilitate its broader efforts to reduce carbon become attractive acquisition targets for inves-
emissions and transition to a more sustainable tors looking to tap into the rapidly expanding EV
and energy-efficient transportation system. By market in the region.
2030, Singapore aims to phase out the sale of
internal combustion engine vehicles. In a bid to Looking ahead
encourage the adoption of EVs, the government In conclusion, while the current market faces
has introduced the Singapore EV Early Adoption challenges such as heightened regulations
Incentive (EEAI). This scheme, which has been and geopolitical uncertainties, companies are
extended to December 2025, offers a rebate on anticipated to actively engage in more strategic
the vehicle’s registration fee to individuals and transactions within the TMT sector in the com-
businesses who buy fully electric cars and taxis. ing months, as investor confidence begins to
To support the transition to EVs, Singapore also recover.
plans to significantly increase the availability
of EV charging points nationwide. The govern- Sustainability continues to be a top priority for
ment has set a target of installing 60,000 charg- many businesses, with an increasing number of
ing points across the island by 2030, to provide companies integrating sustainability into their
convenient access to charging stations for both capital allocation decisions and using it as a key
private vehicle owners and fleet operators. As of driver of M&A activity.
November 2024, Singapore has made significant
progress towards its goal, with more than 15,300 The excitement surrounding AI, particularly gen-
charging stations now available nationwide. erative AI, remains strong. As a result, invest-
ments in AI companies across the region are
Singapore’s ambitious EV adoption goals are expected to rise.
likely to create new opportunities for M&A activ-
ity in the region. As Singapore races towards Looking ahead, the authors anticipate more stra-
widespread EV adoption, there will be increas- tegic deal-making activity focused on acceler-
ing interest in innovative businesses working on ating digital transformation or decarbonisation
technologies like EV batteries and EV charging within businesses.
infrastructure. For example, in 2023, Singa-

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