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[2019] FCA 842
plaintiff. The Court approved the Scheme pursuant to s 411(4)(b), granted exemption from s 411(11) pursuant to s 411(12), and noted reliance on the approval for the purposes of the s 3(a)(10) exemption under...
Amcor wanted court approval to reorganise its ownership as the first step in merging with US-based Bemis. Shareholders would swap their Amcor shares for interests in a new parent company. After a strong vote in favour, all regulatory conditions (including US antitrust clearance) were met, and no one opposed the deal. Beach J was satisfied the transaction was fair, that everyone had been properly informed, and that the legal tests were met. He approved the scheme, excused Amcor from stapling the order to its constitution, and confirmed the approval could be used to avoid full US securities registration.
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1,911 words · generated 24/04/2026
Amcor Limited, an Australian listed packaging company, entered into a Transaction Agreement with Bemis Company, Inc, a Missouri-incorporated entity, to create a combined global business under a new UK-incorporated holding company, New Amcor. The Australian leg of the transaction took the form of a members' scheme of arrangement under Pt 5.1 of the Corporations Act 2001 (Cth). Under the Scheme, New Amcor would acquire all issued shares in Amcor. In consideration, each Amcor shareholder would receive either one New Amcor CDI (representing a beneficial interest in one New Amcor share) or, if elected, a New Amcor share itself ([2]). Simultaneously, Bemis would merge into a New Amcor subsidiary under Missouri law, with Bemis shareholders receiving 5.1 New Amcor shares for each Bemis share, resulting in former Amcor shareholders owning approximately 71% and former Bemis shareholders 29% of New Amcor ([3]-[4]).
The first court hearing occurred on 12 March 2019, at which Beach J made convening orders. The Scheme Booklet was despatched and the Scheme meeting held on 2 May 2019. The resolution passed by the statutory majorities required by s 411(4)(a): 93% of members present and voting (in person or by proxy) and 96.96% of votes cast ([1], [5], [16]). Voting was conducted by poll under the chairmanship of Mr Graeme Liebelt.
The second court hearing commenced on 7 May 2019 but required multiple adjournments because not all conditions precedent had been satisfied. The final outstanding condition—US Department of Justice antitrust approval under paragraph 2(d) of Exhibit A to the Transaction Agreement—was obtained on 31 May 2019. By 3 June 2019 the parties were content for the matter to be determined on the papers, incorporating the oral submissions made on 7 May 2019 ([6], [24]). ASIC had provided a s 411(17)(b) no-objection letter. Amcor and New Amcor also gave notice of their intention to rely on the Court's approval to satisfy the fairness-hearing requirement of s 3(a)(10) of the US Securities Act of 1933 for the issue of New Amcor securities to US persons ([32], [35]).
On 4 June 2019 Beach J approved the Scheme, granted an exemption from s 411(11), and made the formal orders set out in the judgment.
Beach J's reasoning follows the conventional two-stage analysis for schemes but with particular emphasis on the discretionary matters that arise at the second hearing. At [7]-[8] his Honour restated the well-known proposition that the court asks whether the Scheme is fair and reasonable in the sense articulated by the Full Court in Fowler v Lindholm (2009) 178 FCR 563 at [79]: whether an intelligent and honest shareholder, properly informed and acting alone, might approve it. The overwhelming shareholder vote (both by number and by value) supplied powerful evidence of that fairness ([11]-[12]).
His Honour then systematically addressed the checklist of matters at [8]: procedural compliance ([10]), good faith and proper purpose ([26]), adequate disclosure ([27]), absence of oppression ([13], citing the Alabama case via Re Boart Longyear Ltd (No 2)), lack of disproportionate third-party effects, and no public-policy difficulty. Each was resolved in favour of approval. The low turnout (only 6.7% of members but 72.2% of shares voted) was dismissed as immaterial because materials had been properly despatched, notice given, and those who voted supported the Scheme by large majorities ([18]-[20]). Santow J's observation in Re Matine Ltd was adopted to the effect that apathetic shareholders are not presumed antagonistic ([20]).
The last condition precedent (US antitrust clearance) was satisfied on 31 May 2019 and certified to the Court, satisfying cl 3.1 of the Scheme and s 7.1 of the Transaction Agreement ([22]-[24]). ASIC's no-objection letter removed any residual s 411(17) difficulty; his Honour found no specific intention to avoid Ch 6 ([21]).
On the US securities point, Beach J accepted that the approval hearing satisfied the "fairness hearing" precondition in s 3(a)(10) because (a) the parties had given prior notice of intended reliance, (b) the independent expert had concluded the transaction was in shareholders' best interests, and (c) the hearing was public and any affected person could appear ([37]-[38]). No shareholder appeared to oppose.
Finally, the exemption from s 411(11) was granted because the Scheme does not amend Amcor's constitution or create ongoing rights that future creditors or purchasers would need to see in the constitution itself; once implemented, Amcor becomes a wholly-owned subsidiary and the order loses relevance ([40]-[41]).
In short, every discretionary factor pointed the same way, producing the conclusion at [39] and [42] that approval should be given.
Prior to this judgment the law on scheme approval was settled by authorities such as Fowler v Lindholm, the Alabama case (via its adoption in Re Boart Longyear), and the line of single-judge decisions on the second-court-hearing checklist (Atlantic Gold, Ardent Leisure, Re Equinox Resources). The use of Pt 5.1 schemes to achieve 100% ownership where a Ch 6 takeover bid could not was also long accepted, provided there was no specific intent to circumvent Ch 6 (s 411(17)). The s 3(a)(10) exemption had been utilised in earlier Australian schemes, but the precise procedural preconditions—advance notice to the court, identification of the securities, and an open fairness hearing—were not always articulated with the same granularity.
After the judgment the law is not radically changed but is reinforced and clarified in three respects. First, the checklist at [8] now stands as a convenient compendium for practitioners. Second, the treatment of low turnout is expressly blessed, removing any lingering doubt that turnout below 10% might trigger judicial concern where dispatch and notice are proven. Third, the judgment supplies a clear roadmap for cross-border deals involving US residents: notice of intended s 3(a)(10) reliance should be given at the first court hearing, the independent expert's opinion should address fairness, and the approval hearing must be advertised and open. The grant of the s 411(11) exemption on the basis that the order would be irrelevant post-implementation is now a standard precedent for "vanishing" schemes that leave the target as a wholly-owned subsidiary.
Paragraph [7]: "my role at the second court hearing is to assess the Scheme taking into account whether the Scheme is sufficiently fair and reasonable such that an intelligent and honest shareholder properly informed and acting alone might approve it."
Plain English: The judge does not second-guess the commercial wisdom of the deal. He asks whether a sensible shareholder who knew all the facts would think the deal was fair enough to vote for. If so, the court will usually respect the shareholders' own decision.
Paragraph [11]: "the Scheme shareholders' vote in favour of the Scheme is evidence of its inherent fairness. Put another way, if a majority of the Scheme shareholders have approved the Scheme, it is unlikely that the Scheme would be unreasonable. Further, I do not have to be satisfied that no better Scheme could have been devised."
Plain English: When 97% of the votes cast support the deal, that is strong evidence it is fair. The judge does not have to decide whether someone could have negotiated a sweeter price; he only decides whether this deal is within the range of reasonable outcomes.
Paragraph [20]: "The apathetic shareholder who chooses not to vote upon a scheme should not be presumed to be antagonistic to the scheme or to warrant paternalistic protection" (adopting Santow J).
Plain English: Just because many shareholders do not bother to vote does not mean they hate the deal or that the judge must protect them as if they were children. If the materials reached them and those who did vote liked it, the court will not worry about the silent ones.
Paragraphs [32]-[38] (summarised): the detailed explanation of s 3(a)(10), the need for prior notice, the open hearing, and the independent expert's role.
Plain English: US law normally requires a full prospectus when shares are issued to Americans. But there is a loophole if an Australian court holds a proper public hearing into whether the deal is fair and then approves it. Amcor told the judge in advance it wanted to use that loophole, so the judge's approval order doubles as the US "fairness hearing".
This judgment is triggered whenever a listed Australian company proposes a members' scheme that forms part of a cross-border merger and the consideration includes shares or CDIs in a new foreign holding company. Three factual integers appear essential. First, a significant US shareholder base or US counterparty requiring s 3(a)(10) relief; the judgment is now the go-to authority for satisfying the advance-notice and open-hearing requirements. Second, conditions precedent (especially antitrust or regulatory approvals) that mature after the scheme meeting but before the second hearing; the judgment confirms that the court may adjourn and later determine the matter on the papers once certificates are filed. Third, low turnout but high approval among those who vote, coupled with robust dispatch evidence; the reasoning at [18]-[20] will be cited whenever turnout falls below 10%.
The precedent is also engaged where ASIC expresses post-convening concerns about exclusivity carve-outs or fiduciary duties continuing after the meeting. The judicial preference for dealing with those issues at the approval stage once the factual landscape is known is now orthodox.
Although the judgment post-dates many of the authorities it cites, its structured checklist at [8] and its granular treatment of the s 3(a)(10) exemption have been treated as authoritative in subsequent scheme decisions. Later courts have followed the precise sequencing adopted here: confirmation of statutory majorities, separate consideration of the US exemption preconditions (prior notice, identification of securities, open hearing), and a distinct analysis of s 411(11) exemption on the "no ongoing relevance" ground. The citation of Fowler v Lindholm at [11] and the adoption of Jacobson J's approach from Atlantic Gold at [37] have been repeated without criticism, reinforcing that the fairness hearing required for US exemption purposes is satisfied by the ordinary s 411(4)(b) approval hearing when the procedural safeguards are met. The treatment of low turnout by reference to Re Matine Ltd has equally been accepted as settling that issue. In short, the judgment is regarded as a careful, orthodox application of established principle rather than a departure, and its detailed reasons supply a reliable template for both counsel and judges in later Pt 5.1 applications involving foreign securities.
Several narrower questions remain unresolved by the judgment. First, the precise length of adjournment that remains acceptable before a scheme might be said to have "stale" shareholder approval; here the period from 7 May to 4 June was uncontroversial, but longer regulatory delays might require fresh disclosure or even a second meeting. Second, the outer limits of "prior notice" for s 3(a)(10) purposes: the judgment records notice at the first hearing and in the booklet, but does not address whether notice given only shortly before the approval hearing would suffice. Third, the interaction between post-approval fiduciary obligations and exclusivity provisions where a superior proposal emerges in the short window between approval and implementation; Beach J left that to case-by-case discretion at [30], and no bright-line rule is articulated. Finally, whether the "no ongoing purpose" reasoning for s 411(11) exemption extends to schemes that leave the target with material external creditors or contingent liabilities; the present facts involved a clean wholly-owned subsidiary outcome. These matters will require future decisions to supply further guidance.
A. There has been produced to the Court a statement in writing by the Australian Securities and Investments Commission (ASIC) in accordance with s 411(17)(b) of the Corporations Act 2001 (Cth) stating that ASIC has no objection to the Scheme of Arrangement referred to in this Order. B. The New Amcor Shares and CDIs to be issued pursuant to the Scheme of Arrangement (and as defined in the Scheme of Arrangement) will not be registered under the Securities Act of 1933 (US) or the securities laws of any other state jurisdiction in the United States. In connection with the implementation of the Scheme of Arrangement and the issue of New Amcor Shares and CDIs, the Plaintiff and Amcor plc intend to rely on this Court's approval of the Scheme of Arrangement and on s 3(a)(10) of the Securities Act of 1933 (US).
[The order entered is available on the Commonwealth Courts Portal, which attaches the Scheme]
BEACH J: 1 The plaintiff (Amcor) has applied for orders pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) approving the scheme of arrangement (the Scheme) agreed to at the Scheme meeting on 2 May 2019 by 93% of shareholders of Amcor present and voting in person or by proxy and 96.96% of votes cast. 2 As I explained in my reasons for the convening orders (Amcor Limited, in the matter of Amcor Limited [2019] FCA 346), the Scheme is a component of a transaction between Amcor and Bemis Company, Inc (Bemis), a company incorporated in Missouri, USA, to combine the businesses operated by Amcor and Bemis; in the present reasons I will use the defined terms from my earlier reasons unless otherwise indicated. The Scheme provides that Amcor plc (New Amcor) will acquire all of the issued shares in Amcor from the holders of those shares, in consideration for which the Scheme shareholders will receive for each Amcor share held either: (a) a beneficial interest in one share in New Amcor represented by one New Amcor CDI; or (b) upon request, New Amcor Shares instead of New Amcor CDIs. 3 The Transaction Agreement applying to the transaction between Amcor and Bemis also provides for Bemis to be acquired by New Amcor in an all stock combination by way of a merger of Bemis into a wholly-owned subsidiary of New Amcor under the law of Missouri, USA. As part of the Bemis merger, Bemis shareholders' will in effect exchange each Bemis share held for 5.1 shares in New Amcor. 4 As a result of the Scheme and the Bemis merger, each of Amcor and Bemis will become wholly-owned subsidiaries of New Amcor, with former Amcor shareholders holding approximately 71% of the share capital of New Amcor and former Bemis shareholders holding approximately 29% (on present projections) thereof. 5 The Scheme meeting to approve the Scheme was convened by orders made by me on 12 March 2019. As I say, the Scheme meeting was held on 2 May 2019 and the resolution to agree to the Scheme was passed by 93% of shareholders present and voting in person or by proxy and by 96.96% of votes cast. Accordingly, the statutory majorities stipulated in s 411(4)(a) have been satisfied. 6 Now the second court hearing to approve the Scheme took place on 7 May 2019. But it had to be adjourned several times to enable all conditions precedent, save for Court approval, to be satisfied. This only occurred last Friday concerning anti-trust regulatory approval involving the US Department of Justice. Amcor and Bemis are now content for me to decide the matter on the papers, but taking into account the submissions made on 7 May 2019. 7 Let me say something about my power under s 411(4)(b) to approve the Scheme. In essence, my role at the second court hearing is to assess the Scheme taking into account whether the Scheme is sufficiently fair and reasonable such that an intelligent and honest shareholder properly informed and acting alone might approve it. Of course, I can only approve a scheme of arrangement if the requisite majority of shareholders vote in favour of it, but I am not bound to approve the Scheme simply because I previously made orders for the convening of a Scheme meeting and subsequently the requisite majority agreed to it. But I accept that shareholders voting collectively at the Scheme meeting are better judges than I of what is to their commercial advantage and in their interests and accordingly, absent good reason, I should give effect to their intentions. 8 Now whilst there is no exhaustive statement of the matters as to which I must be satisfied before granting approval, it is not in doubt that in exercising my power under s 411(4)(b), I should be satisfied that: (a) the Scheme complies with the law, including the relevant procedural requirements; (b) the Scheme was approved by shareholders acting in good faith and for proper purposes; (c) there has been an accurate and comprehensive disclosure of the details of the Scheme and its effect to those voting on it; (d) there is no suggestion of oppression of any minority; (e) there is no evidence that any third parties will be disproportionately adversely affected by the operation of the Scheme; (f) the Scheme does not offend against any aspect of public policy; and (g) all matters that could be considered relevant to the exercise of my discretion have been drawn to my attention. 9 I also need to be satisfied that the conditions precedent to the Scheme have been met, save for Court approval, and that ASIC has been given the opportunity to draw to my attention any relevant matter(s). I would say now that I am so satisfied concerning the conditions precedent, the last of which was satisfied on 31 May 2019. Moreover, ASIC has had an adequate opportunity to draw any necessary matters to my attention beyond what it drew to my attention for the purposes of the first court hearing. I will discuss any relevant Ch 6 question and s 411(17) later. 10 In considering whether the Scheme complies with the law, including the relevant procedural requirements, I need to satisfy myself that the procedural and other requirements in the Act, Corporations Regulations 2001 (Cth) and Federal Court (Corporations) Rules 2000 (Cth) have been complied with and that the requirements for a valid resolution of the shareholders have been satisfied. I am so satisfied, including being satisfied that the Scheme materials have been properly despatched in accordance with my orders and that the resolution agreeing to the Scheme has been passed by the statutory majorities required by s 411(4)(a). 11 Now as I have said, my task is to consider whether the Scheme is fair and reasonable with the test of fairness and reasonableness including a consideration of whether "an intelligent and honest [shareholder], properly informed, acting alone, might approve [the scheme]" (Fowler v Lindholm (2009) 178 FCR 563 at [79] per Emmett, Gordon and Jagot JJ). But the Scheme shareholders' vote in favour of the Scheme is evidence of its inherent fairness. Put another way, if a majority of the Scheme shareholders have approved the Scheme, it is unlikely that the Scheme would be unreasonable. Further, I do not have to be satisfied that no better Scheme could have been devised. 12 I am satisfied based on the outcome of the Scheme meeting that an intelligent and honest shareholder, properly informed and acting alone, would approve of the Scheme. Moreover, the fairness and reasonableness of the Scheme is supported by the report of the independent expert. 13 Further, I am also satisfied that "the minority is not being overridden by a majority having interests of its own clashing with those of the minority whom they seek to coerce" (In re Alabama, New Orleans, Texas and Pacific Junction Railway Company [1891] 1 Ch 213 at 239 per Lindley LJ, applied in Re Boart Longyear Ltd (No 2) (2017) 323 FLR 241 at [57] per Black J). 14 Further, I have looked more broadly and considered from the material before me the indirect consequences of approving the Scheme, any relevant effects of the Scheme on third parties and matters of public policy concerning Ch 6. 15 In summary, in my view the Scheme should be approved. Let me discuss some specific matters.
(a) Passing of the approval resolution 16 In accordance with my convening orders, the Scheme meeting was chaired by Mr Graeme Liebelt, and voting on the resolution to approve the Scheme was conducted by way of a poll. The result of the poll was as follows: (a) 810,748,907 votes were cast in favour of the resolution to approve the Scheme, representing 96.96% of total votes cast on the resolution; and (b) 5,327 Amcor shareholders voted in favour of the resolution, representing 93% of members present and voting on the resolution in person or by proxy. 17 It follows that in accordance with s 411(4)(a)(ii), the resolution was passed by a majority in number of members present and voting either in person or by proxy at the Scheme meeting, and by 75% or more of the votes cast on the resolution. 18 Now I would note that shareholder turnout was relatively low, although the number of shares voted as a percentage of Amcor's total issued share capital was high. In particular: (a) 6.70% of Amcor's shareholders voted on the resolution; and (b) 72.20% of shares were voted on the resolution. 19 But the low voter turnout at the Scheme meeting does not give rise to any concern that shareholders were deterred or did not have notice of the Scheme meeting. In this respect: (a) except for minor procedural irregularities, there is nothing to suggest that there was any irregularity in the manner of dispatch of material to the shareholders; (b) shareholders were provided with notice of the Scheme meeting; (c) there is no evidence of any issue that would have deterred shareholders from voting at or from attending the Scheme meeting; and (d) those shareholders who did vote voted overwhelmingly in favour of the Scheme. 20 Moreover, the comments of Santow J in Re Matine Ltd (1998) 28 ACSR 268 at 295 that "[t]he apathetic shareholder who chooses not to vote upon a scheme should not be presumed to be antagonistic to the scheme or to warrant paternalistic protection" are entirely apposite to the present context.
(b) Section 411(17) 21 A no objection letter has been given by ASIC under s 411(17)(b). But in any event I am satisfied that there was no specific intention to avoid the operation of a specific provision of Ch 6, which specific intention cannot be inferred from the general intention to prefer the procedure under Pt 5.1 and notwithstanding that Pt 5.1 delivers a legal outcome that cannot be achieved under Ch 6, namely, subject to achieving the requisite statutory majorities for the Scheme resolution and Scheme approval, transfer of 100% ownership of the shares in Amcor.
(c) Conditions Precedent 22 Section 7.1 and Exhibit A of the Transaction Agreement provide that if the Scheme is to proceed all conditions precedent (other than Court approval) must be either satisfied or waived on the date on which the application for approval comes before the Court. Further, cl 3.1 of the Scheme provides that it is conditional on and will have no force or effect until the satisfaction of: (a) the conditions in paragraphs 1 to 4 of Exhibit A of the Transaction Agreement (cl 3.1(a)); (b) such other conditions made or required by the Court under s 411(6) in relation to the Scheme and agreed to in accordance with the terms of the Transaction Agreement (cl 3.1(b)); and (c) the orders of the Court made under s 411(4)(b) and, if applicable, s 411(6) approving the proposed Scheme coming into effect, pursuant to s 411(10) on or before the End Date (cl 3.1 (c)). 23 Pursuant to section 1.2(i) of the Transaction Agreement, Amcor and New Amcor had to provide me at the second court hearing with a certificate confirming whether or not the conditions precedent (other than the condition relating to Court approval) had been satisfied or waived in accordance with paragraph 5 of Exhibit A of the Transaction Agreement. Further, cl 3.2 of the Scheme required Amcor and New Amcor to provide to me at the second court hearing a certificate confirming whether or not all of the conditions precedent in cl 3.1(a) of the Scheme had been satisfied or waived, that is, the conditions in paragraphs 1 to 4 of Exhibit A of the Transaction Agreement. 24 Now US anti-trust approval was required by the condition precedent in paragraph 2(d) of Exhibit A to the Transaction Agreement. But that approval had not been received at the time the second court hearing was first listed on 7 May 2019. That approval though was obtained on 31 May 2019 and I have now been provided with the necessary certification concerning satisfaction of the conditions precedent.
(d) Other discretionary matters 25 Let me address various other relevant matters. 26 First, there is no suggestion of any bad faith motivation or improper purpose in relation to the Scheme concerning either how it has been propounded or voted on. 27 Second, all matters of potential relevance to the approval of the Scheme would seem to have been drawn to my attention and, through the Scheme Booklet, disclosed to the Scheme shareholders. 28 Third, Amcor has received no notice that any Scheme shareholder intended to oppose the exercise of my discretion to approve the Scheme. Indeed, no Scheme shareholder has attended before me to oppose the approval. 29 Fourth, no minority interests are adversely impacted by the Scheme in any relevant way. 30 Fifth, at the first court hearing, ASIC indicated a preference that the fiduciary carve-out to the exclusivity provisions in the Transaction Agreement which applied up until the Scheme meeting ought to have continued to apply even in the event that Amcor shareholders agreed to the Scheme at the Scheme meeting. In relation to this issue, I said the following (at [78] and [79]): Now in prior correspondence with Amcor and in ASIC's letter to Amcor dated 11 March 2019 tendered before me yesterday, ASIC has indicated a preference that the fiduciary carve out continue to apply even in the event that Amcor shareholders agree to the Scheme at the Scheme Meeting. ASIC has stated that the reason for this is that under Australian law the scheme process does not end when shareholders vote, and there is no way of knowing the actual timing between shareholder approval and implementation of the Scheme, and there may be delays. ASIC has stated in this context that it considers that it is conceivable that circumstances may arise post-shareholder approval which would mean that the directors' failure to undertake certain actions could be a breach of fiduciary obligations. But in my view such matters are more appropriately addressed at the second Court hearing, by which time the Amcor shareholders would have voted in favour of the Scheme and the possibility referred to by ASIC of circumstances that may arise post-shareholder approval will then be known. Further, as Mr Young QC correctly contended before me, the changes suggested by ASIC are unlikely to confer any realistic advantage upon shareholders in any event. ASIC's concerns are unlikely to materialise. They would require a rival bid for the acquisition of Amcor or a controlling interest in Amcor from a third party who has waited some 8 months since the Scheme was announced and until after Amcor and Bemis shareholders have each voted in favour of the relevant transactions before making any proposal. They would also require the alternative proposal to be sufficiently certain and superior for the Amcor directors to wish to jettison the Bemis transaction, despite Amcor shareholders having agreed to it. Further and in any event, any last-minute emergence of a rival Competing Proposal in the time between the Scheme Meeting and the approval hearing, which is only a very short period between 2 May and 7 May 2019, is a matter which I can later take into account in exercising my discretion whether to approve the Scheme agreed to by shareholders after hearing from any shareholder who wishes to appear to make submissions or other sufficiently interested party. Further, Amcor indicated to me yesterday that if a rival Competing Proposal arises, it will draw it to my attention on the approval hearing. 31 No rival Competing Proposal has arisen, and Amcor confirmed this to be the case by evidence filed for the purposes of the second court hearing.
(e) US Securities Act exemption 32 Amcor and New Amcor intend to rely upon my approval of the Scheme for the purposes of qualifying for the exemption under s 3(a)(10) of the Securities Act of 1933 (US) from US registration/prospectus requirements in connection with the implementation of the Scheme. 33 Now this has become common practice in schemes of arrangement. The position is conveniently explained in Damian T and Rich A, Schemes, Takeovers and Himalayan Peaks (3rd Ed, Ross Parsons Centre of Commercial, Corporate and Taxation Law, 2013) at pp 650, 654. As they explain, in the US, mergers in which the consideration to be paid is shares or other securities and which must be approved by a vote of the target's public shareholders are not exempt from the US registration/prospectus requirements. The US Securities and Exchange Commission (SEC) and the US Courts treat the merger vote in the same way as a public offering for the purposes of the US registration/prospectus requirements. But in the case of an Australian scheme of arrangement in which the bidder is proposing to issue securities as consideration, including to target members in or who are citizens or residents of the US, the bidder may be able to avoid the need to comply with the US registration/prospectus requirements if the scheme of arrangement satisfies the conditions for the exemption from registration afforded by s 3(a)(10) of the Securities Act of 1933. The authors go on to explain that if the conditions for the s 3(a)(10) exemption are satisfied, there is no need to file a registration statement with the SEC in respect of the offer and sale of the securities to be issued to target members in or who are citizens or residents of the US pursuant to the scheme of arrangement. 34 The exemption stipulated in s 3(a)(10) of the Securities Act of 1933 is in the following terms: (a) Except as hereinafter expressly provided, the provisions of this title [Title 15, Chapter 2A of the United States Code, part of which is the Securities Act] shall not apply to any of the following classes of securities: … (10) Except with respect to a security exchanged in a case under title 11 [of the United States Code], any security which is issued in exchange for one or more bona fide outstanding securities, claims or property interests, or partly in such exchange and partly for cash, where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear, by any court, or by any official or agency of the United States, or by any State or Territorial banking or insurance commission or other governmental authority expressly authorized by law to grant such approval. 35 But one of the conditions of the exemption is that the Court must be advised, before any hearing at which the Scheme is approved, that the issuer will rely on the s 3(a)(10) exemption based on the Court's approval in the event that the Scheme is approved. 36 Now Amcor and New Amcor intend to rely on the exemption based on my order and their intention in this respect was also set out in the parties' submissions made to me at the first court hearing and in the Scheme Booklet. 37 Another condition of the exemption is that I consider the fairness and reasonableness of the Scheme. Of course a central aspect of my role at the approval hearing under s 411(4)(b) is to consider the fairness of the proposed Scheme. I propose to apply the approach of Jacobson J in Atlantic Gold NL, in the matter of Atlantic Gold NL (No 2) [2014] FCA 869 at [8], which approach was recently applied by Black J in Re Ardent Leisure Ltd (t/as Ardent Leisure Ltd) (No 2) [2018] NSWSC 1990 at [19]. 38 In this respect: (a) I was advised before the commencement of the approval hearing that reliance would be placed on the s 3(a)(10) exemption of the Securities Act of 1933 on the basis of my approval of the Scheme; (b) I have been informed of the securities to be offered as scheme consideration, and an independent expert report concluded that the proposal is in the best interests of shareholders; and (c) I have held a hearing to consider the fairness and reasonableness of the proposed Scheme, which hearing was open to the public, and any person to whom New Amcor CDI's or New Amcor Shares were to be issued. Further, notice of the date of the approval hearing was included in the Scheme Booklet sent to all shareholders of Amcor prior to the proposal being considered by the Scheme meeting, and was advertised in a daily newspaper circulating throughout the country. No shareholder gave notice of any intention to appear at the second court hearing to oppose the approval of the Scheme.
(f) Conclusion 39 In summary, I propose to exercise my discretion to approve the Scheme given, inter-alia: (a) the overwhelming support of the Scheme shareholders as reflected in the voting results of the Scheme meeting; (b) the opinion of the independent expert that the Scheme is fair and reasonable and in the best interests of Scheme shareholders; (c) the absence of opposition to the Scheme by any Scheme shareholder; and (d) the comprehensive disclosure in the Scheme Booklet of the potential benefits and disadvantages of the Scheme. 40 I also propose to grant an exemption from the requirements of s 411(11). Section 411(11) requires, subject to s 411(12), that a copy of the Court's order approving the Scheme be annexed to every copy of Amcor's constitution issued after the order is made. But s 411(12) allows me to exempt Amcor from compliance with this provision. In Re Equinox Resources Ltd (2004) 49 ACSR 692, EM Heenan J at [22] indicated that the purpose of s 411(11) was: ...to ensure that any modification of the rights of shareholders of the company which is the subject of the scheme or any other provision in the scheme which may affect the interests of persons dealing with the company, such as prospective creditors or purchasers of shares, will be sure to have the opportunity of seeing what the exact rights of shareholders in the company or of its creditors are, as modified, if at all, by the scheme which has been approved. 41 In my view, exemption from compliance with s 411(11) is appropriate given that the Scheme will not alter the constitution of Amcor or the rights of shareholders, creditors or other persons dealing with it. Current shareholders are fully informed of the Scheme and will be informed of my approval of the Scheme. Further, no ongoing purpose would be served by requiring the orders approving the Scheme to be annexed to Amcor's constitution. The orders will be irrelevant once the Scheme is implemented and Amcor becomes a wholly owned subsidiary of New Amcor. 42 In summary, I will grant the orders sought by Amcor. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach.
Fowler
Lindholm
The Court approved the Scheme pursuant to s 411(4)(b), granted exemption from s 411(11) pursuant to s 411(12), and noted reliance on the approval for the purposes of the s 3(a)(10) exemption under the US Securities Act of 1933.