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Recommendations Ready for Commission Action to Facilitate U.S. Investors' Exercise of Rights in Overseas Mergers and Acquisitions

Staff Completes Review of Cross-Border Tender, Exchange Offer and Business Combination Rules


Washington, D.C., April 29, 2008 — The Securities and Exchange Commission's Division of Corporation Finance said today that it has completed its review of the Commission's cross-border tender, exchange offer and business combination rules, and has prepared recommendations for consideration by the Commission.

The cross-border tender offer rules apply to offers for the securities of foreign companies that have U.S. security holders. They do not apply to offers for U.S. companies.

The goal of the review of the current rules, which were adopted by the Commission in 1999, was to determine whether changes could be made that would further facilitate the ability of U.S. investors to exercise their rights in connection with cross-border mergers and acquisitions. This review included looking at areas of conflict and inconsistency with foreign regulations and practice that are frequently encountered in cross-border business combinations and that result in U.S. investors being excluded from these transactions.

"As I have noted publicly on a number of occasions earlier this year, preparing recommendations for the Commission to consider regarding ways to improve the cross-border business combination rules was a high priority for the Division. I am pleased to deliver our recommendations to the Commission and look forward to the public discourse that will follow the Commission's issuance of any proposed changes," said John White, Director of the Division of Corporation Finance.

The Division recommends Commission consideration as soon as possible. Issuance of a rule proposal by the Commission based on the Division's recommendations requires a vote of the Commissioners, followed by a public comment period.

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An excerpt from Mr. White's Jan. 23, 2008 speech at the 35th Annual Securities Regulation Institute in San Diego outlines the Division's priorities:

"The cross-border tender offer rules are another area in which the staff may recommend revisions in the near future. In fact, revisions to these rules are currently the number one rulemaking priority in our Office of Mergers and Acquisitions. With eight years of experience using the current rules, I believe that most will agree that the rules have worked well in balancing the need to promote the inclusion of U.S. security holders in cross-border transactions against the need to provide the protections of the federal securities laws to those holders. Despite the success of these rules however, the staff is considering revisions to address areas that may not be working as well as expected and areas where relief could be expanded. For example, it may be appropriate to make revisions with respect to the way U.S. ownership of a subject company's securities is calculated."

Read the entire speech at: http://www.sec.gov/news/speech/2008/spch012308jww.htm

An earlier speech by Mr. White describing this and other Division of Corporation Finance priorities for 2008 is available at: http://www.sec.gov/news/speech/2008/spch011408jww.htm



Modified: 04/29/2008