Asset Acquisition or Disposal Transaction
A transaction that a listed company or its subsidiary acquires or disposes of tangible or intangible assets entered into with an individual or juristic person or an “Asset Acquisition or Disposal Transaction" with a considerable value may affect the company as a whole. Accordingly, in order to enter into this type of transaction, the following criteria are required:
● The directors and executives must comply with the relevant criteria in good faith, with fiduciary duty;
● The investors are allowed to access to sufficient information with respect to the investment in the transaction; and
● The shareholders participate in the business decision-making.
● Nature of an acquisition or disposal transaction:
● 4 criteria used in the calculation of transaction value:
= Total Tangible Assets – Liabilities – Non-controlling interests
- NTA (Net Tangible Asset)
§ Tangible Assets
= Total Assets less intangible assets, e.g., goodwill, deferred costs
§ The calculation is based on the information in the consolidated financial statement.
Duties of a listed company according to the transaction value
** The disclosure shall be made in the “Opinions of the Board of Directors on the Entering into of the Transaction"
Summary of Important Issues:
1. A transaction which significantly causes an impact on the company (transaction value of ≥ 50%) requires an approval from the shareholders' meeting.
2. The transaction value will be a total amount accumulated from all transactions of a similar type occurred during the six-month period prior to the date of the transaction.
3. The value of the transaction shall be considered separately between the acquisition transaction and the disposal transaction.
4. If the transaction value can be calculated based on different basis, the basis that yields a highest value shall be applied.
Related Rules and Regulations