What you need to know about the Cayman Islands statutory merger

The Cayman Islands introduced mergers and consolidations in 2009 under Part XVI of the Companies Act (as amended). The law has since been amended. There has been a surge in the use of statutory mergers as the most common method of takeover and privatisation of companies listed on the New York Stock Exchange or Nasdaq Stock Market.

This guide seeks to outline the process of a Cayman Islands statutory merger and consider the advantages and disadvantages of using this as a mechanism for effecting take-private transactions, and also explores the right of dissenting shareholders to obtain fair value for their shares. It is worth noting though that statutory mergers and in particular short form mergers may also be used in private acquisitions as well as for the rationalisation of structures.