Date Published: 26 August 2019
The “Business Asset Transaction” consent exception and its application to share sale transactions
Share sale transactions commonly involve the disclosure of data, financial information and key contracts of the target company to the buyer, before a share sale agreement is signed. Such disclosures are often made during the process of due diligence in order to allow the prospective buyer to consider the risks and benefits involved in the potential purchase. While general considerations of confidentiality of the target’s information have long been a factor in managing information flows in an M&A transaction, more recent developments in the importance of “data” in business models and laws protecting “personal data” mean it is relevant to consider in particular how the relevant data protection law applies to disclosure to a prospective buyer of personal data of the target company’s employees and customers.
While the confidentiality of the information disclosed can (at least in theory) be protected by a robustly drafted non-disclosure agreement, any disclosure of personal data by the seller and the consequent collection and use of the personal data by the prospective buyer has to comply with the Personal Data Protection Act 2012 (“PDPA“). The PDPA, which came into force on 2 January 2013, regulates all collection, use and disclosure of personal data by organisations.
This video briefly discusses the consent obligation under the PDPA, focuses on how parties can avail themselves of the “business asset transaction” consent exception (“BAT exception”) and highlights some of the key considerations that parties relying on the BAT exception may wish to take note of, particularly in the context of a share sale transaction.
Disclaimer: This update is provided to you for general information and should not be relied upon as legal advice.
CNPLaw’s Mergers and Acquisitions Lawyers
Bill is an English lawyer who is also registered to practise Singapore law and he is recognised by professional and commercial publications. According to Chambers and Partners, Bill is “experienced in providing regulatory advice and drafting fund documentation.” For 2020, investment funds, IFLR1000 has rated him as “Highly Regarded” and Asialaw Leading Lawyers has ranked him as a “Distinguished practitioner”. Bill is also recommended by The Legal 500 Asia Pacific 2020 for the Investment Funds practice.
Each M&A deal entails the confluence of multiple legal disciplines. That is why we take great care when assembling a team for each deal, ensuring that there is an optimal mix of specialisation in the clients’ identified areas of concern, such as tax, employment and intellectual property, and necessary industry-specific experience.
We provide support to our clients at every stage of the deal. We will be there at the beginning of the process, helping to facilitate the negotiations between the parties and advising on the structure of the transaction. Once the parties have reached a consensus, we meticulously prepare the necessary documentation. Recognising that M&A deals are often the first page of a new chapter for the parties involved, we also provide post-transaction support to ensure a smooth transition such as the preparation of shareholder agreements, employment agreements, and other relevant commercial documentation.
With the prevalence of technology and increasing connectivity through the internet, cybersecurity and data protection are areas that have grown more important in Singapore.
Since the introduction of the Personal Data Protection Act 2012 (“PDPA), it is mandatory for organisations to comply with data protection rules and we strive to help our clients understand that compliance with the PDPA is no longer an option.
We also advise our corporate clients in relation to ad hoc queries on potential breaches of the law and the PDPA, and highlight data protection issues that may arise in the context of employment or HR policies.