MERGERS and acquisitions are a feature of the corporate landscape. A common mechanism used to enable an M&A is the scheme of arrangement.

The scheme is a flexible tool used to effect a compromise or arrangement between the company and its shareholders. It has three stages under the statutory framework prescribed in the Companies Act (Chapter 50 of Singapore).

First, an application is made to the Singapore High Court for an order that a meeting of shareholders be summoned. The court will typically sanction the voting arrangements of the scheme meeting (within the framework prescribed by the Companies Act) at this stage.