Jamaica

The main M&A structures in Jamaica, in order of popularity, are:

• share purchases (with or without “follow on” formal takeover bid);
• asset purchases; and
• schemes of arrangement.

Where the target is a private company, share or asset purchase would be the customary acquisition methodology. Where the target is a public company listed on the Jamaica Stock Exchange (JSE), transactions would typically be structured as:

• purchase of a substantial or controlling interest in a private sale followed by mandatory takeover bid if the acquirer, along with other concert parties (such as affiliates) end up holding 50% or more of the target’s shares (counting shares previously held); or
• “lock-up” of one or more major shareholders followed by takeover bid for a minority or controlling stake in the target or for all the shares in the target.

Schemes of arrangement are more popular in intragroup restructurings, amalgamations, and demergers or “going private” transactions.

Private companies

M&A transactions, with respect to private companies, are usually implemented by negotiated contracts — for shares or assets. The Securities (Takeovers and Mergers) Regulations, 1999 (“TOMs Regs”) and the JSE General Principles Relating to Takeovers and Mergers (“JSE Takeover Code”) do not apply to these transactions.

Public companies

In the case of all public companies, the TOMs Regs apply and in the case of public companies listed on the JSE, the JSE Takeover Code would also apply. The TOMs Regs and the JSE Takeover Code are similar in content — the only difference is the enforcement mechanism. In the case of the TOMs Regs, the enforcer is the Financial Services Commission (FSC) (the Jamaican securities regulator) and enforcement may be by criminal prosecution. In the case of the JSE Takeover Code, enforcement is by the JSE, and enforcement is by domestic disciplinary measures such as suspension of trading or delisting of the shares of the target.

The principal difference between a takeover by a scheme of arrangement and a takeover bid is the minority “squeeze-out” threshold (see Question 11, below, for further details).

The Jamaican M&A market can be divided into two distinct sectors: the private market and the public market. In the private market, small deals of USD 25 million and under are a regular occurrence. These are usually share or asset deals, which often go unnoticed.

The public market deals can also be divided into two categories; namely:

• Main Market companies — large companies listed on the JSE; and
• Junior Market companies listed on the Junior Market of the JSE (with issued share capital of JMD 750 million and below (but not less than JMD 50 million)).

M&A activity is more prevalent in the Junior Market category. Main Market transactions are rare. The main reason is the fact that most Main Market companies (and the same applies to several Junior Market companies) are usually controlled by one major shareholder with over 50% of the shares. Control is therefore seldom in play in relation to those companies except where the controlling shareholder is making an exit play.

The market is small and trends are difficult to discern. Private equity activity in Jamaica is focused on real estate as opposed to equities. The fact that “control” is not at play in most of the companies on the JSE means that the customary private equity playbook is not generally available to private equity players. What we have instead is investment in private companies which are then subsequently listed on the Junior Market.

The market is characterized by shareholders’ passivity if not apathy and as a general rule companies and management are seldom held accountable — again because of the closely held shareholding structure of most companies. We have not detected any discernible impact on the market from external factors such as geopolitical risks.

The Jamaican economy rebounded strongly from the effects of the COVID-19 pandemic led by tourism and inbound remittances. Since then, the growth has been steady but modest. Inflation has moderated to single digit (4–5%) and in spite of being hit by Melissa, a category 5 hurricane in October 2025, growth has generally resumed but remains modest. Inflation has moderated to manageable levels and unemployment is at historic lows. Public debt has declined significantly from historic high inflation, reflecting improved fiscal discipline. Despite those strengths the economy remains vulnerable to external shocks, global trends, and climate events as it enters 2026.

The expectation is that M&A activity will be moderate with interest primarily from Caribbean and regional investors focusing on opportunities in the tourism, manufacturing, and financial sectors. As banks and major financial institutions race to introduce fintech solutions to meet customer expectation and strengthen their cybersecurity infrastructure, it is anticipated that larger banks and financial institutions will show interest in AI, fintech and data analytic startups. On the regulatory side, the Fair Trading Commission (FTC) (the competition authority) has been pressing the government to amend the law to require pre-merger notification to be given to the FTC. It is possible that this amendment could be made during the current year.

Private companies

In the case of private companies in Jamaica, no special law applies to the transaction itself beyond the general law of contract. If the private company is a regulated entity (such as an insurance company, securities dealer, bank or other financial institution) the approval of the relevant regulator would typically be required. Competition law issues (antitrust) may also arise if the transaction is perceived as one that may substantially lessen competition in a market sector.

Public companies

M&A transactions relating to public companies are directly governed by two sets of regulations that are similar in content. First, the TOMs Regs administered by the FSC and, secondly, the JSE Takeover Code administered by the JSE where the target is listed on the JSE.

Pre-approvals

Whether the deal is private or public, pre-approval would be required where the target is regulated (such as financial institutions) from the relevant regulator. The regulatory approval is usually triggered by the regulator having the power to approve holders of substantial interest in the regulated entity.

In the case of public companies, where the transaction is by way of a takeover bid, it is customary practice for the Takeover Bid Circular to be sent to the FSC and JSE for “no objection” confirmation and the same typically applies to the Directors’ Circular (see further details under Question 11, below).

Most transactions are cash deals instead of share swaps. Earn-outs are relatively common in private deals but not in public takeovers. In the case of public companies, share swaps tend to be more complicated because the acquirer or other party whose shares are being offered for compensation has to make extensive disclosures to the target’s shareholders to enable the consideration for shares to be evaluated. In a non-cash deal a fairness opinion would be customary.

In private deals and friendly public deals, due diligence tends to be fairly extensive. In most public takeovers, and certainly in hostile deals, due diligence may be non-existent or minimal. In private deals it is commonplace for the target to establish an electronic data room (EDR) populated with legal, financial, tax, ESG, and stakeholder data. Bidders, or proposed contracting parties, would typically sign a confidentiality agreement incorporating data room rules.

With the enactment of the Data Protection Act in 2020, which came into full operation on December 1, 2023, personal data has become an issue. Contracting parties would typically undertake a Data Transfer Impact Assessment Study and Analysis to determine whether, and to what extent, the processing of such personal data is necessary for the purpose of the legitimate interest of the data controller. In some cases where the data subjects are employees who may wish to establish new relationships with the acquirer they may be asked to consent to the release of their personal data to the acquirer.

We have seen no completed transaction with warranty & indemnity insurance. No doubt deal sizes in the Jamaican market are too small to be of interest to such insurers or the parties involved. One such deal (USD 4 billion), in which warranty and indemnity insurance was in play, was aborted due to the COVID-19 pandemic.

Foreign buyers are not treated differently from domestic buyers. No foreign investment approval or land-owning permit is required as is the case in some Caribbean countries. This applies regardless of whether the subjects of the transaction are shares or assets in a private company or shares in a public company.

The only foreign holding restriction arises under the Banking Services Act, where a foreign government or any agency thereof is restricted from holding, in excess of 5%, in a Jamaican licensed bank or deposit-taking institution or the financial holding company for such bank or licensed deposit-taking institution.

In public M&A transactions in Jamaica, timely market disclosure is closely monitored by the Regulatory and Market Oversight Division (RMOD) of the JSE. The Securities Act contains strict prohibitions against insider trading and market manipulations. The disclosure points are as follows:

• on dispatch of the Offer Letter by the Acquirer;
• on dispatch of the Directors’ Circular;
• disclosure in the course of the bid whether it has become unconditional; or
• disclosure 10 days before the bid expiration date that the bid will not be extended.

Public takeovers are regulated by the TOMs Regs and the JSE Takeover Code. They both provide for the same takeover process.

• The acquirer may make a straight takeover bid for all the outstanding shares of the target (full bid) or for only some of the shares (partial bid). The acquirer may enter into “lock ups” before making a bid or may actually purchase shares (usually a controlling interest) and then make a mandatory bid to the other shareholders.
• The acquirer’s bid will be in the form of an Offer Circular, which must contain certain prescribed information. It is customary practice for the FSC and the JSE to review and approve the circular but that is not a strict legal requirement.
• The Offer Circular is sent to the target.
• Within seven days, the target is to send the Directors’ Circular to its shareholders and arrange publication at least once in a Jamaican newspaper with island-wide circulation.
• If the offer becomes unconditional — usually because tenders are received for the percentage of shares sought in the bid — then the acquirer must announce that the offer will remain open for a further 14 days day unless the acquirer had previously given at least 10 days’ notice that the offer would not be extended and the offer becomes, or is declared, unconditional on the expiry date.
• A full offer for all shares must remain open for at least 21 days. In a partial bid:
  • the bid must remain open for no more than 35 days but after close, shares traded during a 14-day period must be accepted; and
  • if the shares tendered exceed the bid amount, acceptances shall be prorated across all tendered holdings.
• If the acquirer, via its bid, acquires 90% of the shares of the target (excluding shares held before by the acquirer and its subsidiaries or any nominee for any of them) then after a four-month period following the close of the bid, a two-month window opens under the Companies Act, 2004 during which the acquirer can squeeze out the dissenting shareholders by serving written notice upon them. If at the time when the bid was made the acquirer or its subsidiaries or nominee already held up to 10% of the target shares, a further squeeze out condition will apply; namely that the assenting shareholders, whose acceptances made up the 90% or more of the shares; must constitute at least 75% in number of the target shareholders.
• A dissenting shareholder served with a “squeeze-out” notice may apply to the court for an Order to halt the squeeze-out or impose conditions. English cases (Re Hoare & Co. Ltd. (1934) 150 LT 374; Re Bugle Press Ltd [1961] Ch. 270; and Re Press Caps Ltd. [1949] Ch. 434), which will generally be followed in Jamaica, show that the court’s power to interfere is extremely narrow and the court will not revalue the target or second guess the commercial merits of the transaction or reprice the offer. In rare cases, the court could set aside the notice of compulsory acquisition or order that the dissenting shareholders’ shares not be acquired where the dissenting shareholder proves:
  • fraud on the minority;
  • coercive or abusive conduct;
  • material non-disclosure;
  • that the statutory thresholds were not met; or
  • other instances of majority oppression of the minority.

A minority dissenting shareholder has no statutory right of appraisal.

In consensual takeovers, whether by contract or scheme of arrangement, deal protection measures (such as break fees, exclusivity, “no shop”, matching rights or “last look” rights, asset lock-up/option lock-ups, fiduciary-out clauses and the like) are all permitted.

There is no special forum set up to regulate or resolve M&A disputes nor are there any special governing laws in relation to such disputes. If the parties agree, resolution could be by arbitration or expert determination but in the absence of an agreement among the disputants, the recourse would be to the courts. In Jamaica the relevant court system would be first to the trial court of first instance called the Supreme Court, from which appeal lies to the Court of Appeal. The apex court in the judicial system is the Privy Council in the United Kingdom to which appeals lie upon leave being granted by the Court of Appeal or the Privy Council itself. In certain constitutional cases, appeal to the Privy Council is as of right.

Unlike the United States and Europe where emerging technology such as AI, machine learning, blockchain, advanced data analytics and life sciences are influencing what companies are being acquired and how deals are executed, that is not the case in Jamaica. In Jamaica, the influence of emerging technology is more indirect and opportunity driven. Jamaica deal flow is comparatively small and there are very few companies operating in the emerging technology area. Nevertheless, investors interested in the financial sector, business process outsourcing/knowledge process outsourcing and logistic and supply chain will focus on the extent to which their targets have integrated AI tools, robust cybersecurity, digital platforms, and scalable IT infrastructure in their businesses. Companies in any sector still running on legacy servers, manual processing, and fragmented data will attract low valuation and a few local private equity investors are seeing opportunities to acquire those companies with a view of extracting value through data integration, cloud computing, and AI-driven solutions.

Two significant developments in corporate M&A have occurred in the last year or so. These are legal in nature.

Meaning of mandatory bid

In a public takeover, if the acquirer and its concert parties (such as subsidiaries) end up holding more than 50% of the shares of the listed public company, the acquirer is required to make an offer to the other shareholders to acquire their shares on the same terms. Conventional practice over many years was that the mandatory offer had to be an unlimited offer whereby the acquirer was obliged to accept all shares tendered by the remaining shareholders.

In three recent M&A transactions, the FSC and the JSE have both sanctioned follow-on mandatory partial bids limited to a nominal percentage of the outstanding shares — say 1%. No official ruling has been issued by either organization and the legal basis is uncertain.

Judicial abolition of share cancellation schemes

The second development arises from a decision of Jamaica’s apex court the UK Privy Council in Cable & Wireless Jamaica Limited v. Abrahams [2025] UKPC 44. In that case, the Privy Council ruled that the Jamaican Companies Act, 2004, unlike the UK Companies Act, does contain a general power for a company to reduce its share capital and the limited circumstances provided for under the Act did not allow a financially sound company to cancel its share capital and immediately issue new shares to the acquirer. This means that takeovers by schemes of arrangement in the future will have to be done by share transfer schemes rather than by share cancellation schemes.

A share transfer scheme, if done off the JSE, will attract transfer tax at 2% and if done across the Exchange will attract JSE cess and broker’s fees.