The Cayman Islands Companies Act (Revised) (“Companies Act”) permits contractual mergers and consolidations in Cayman without the need for court approval and a procedure whereby the assets and liabilities of a company can, by operation of law, vest in another company upon such a merger or consolidation.

The differences between mergers and consolidations in Cayman

A merger is the merging of two or more constituent companies, the vesting of their undertakings, property and liabilities in one of those companies as the surviving company and the dissolution, without formal winding up, of the constituent companies other than the surviving company.

A consolidation is the combination of two or more constituent companies into a new consolidated company, the vesting of the undertaking, property and liabilities of the constituent companies into the consolidated company and the dissolution, without formal winding up, of all the constituent companies.

The difference, therefore, is that a merger results in one constituent company continuing to exist as the surviving company, whereas consolidation results in a new consolidated company.

Any company limited by shares incorporated under the Companies Act (other than an exempted segregated portfolio company) may participate in a merger or consolidation as a constituent company with other Cayman companies or foreign companies (provided that the laws of the foreign jurisdiction permit such merger or consolidation). A key feature of the law is that the surviving or consolidated company may either be a Cayman company or a non-Cayman company.

For more information about mergers and consolidations in the Cayman Islands, we have prepared a short overview. Please download the guide below by entering your details. For any questions, do not hesitate to contact our lawyers.