25/08/2026
CORPORATE TERMINOLOGY MISCONCEPTIONS: M&A VS. IPO, SAME OR DIFFERENT?
Unraveling the Confusion Between Public and Private Market Company Transactions
In the corporate and financial sectors, the terms Mergers and Acquisitions (M&A) — meaning the consolidation or transfer of business ownership — and Initial Public Offering (IPO) — meaning the first sale of a company's stock to the general public — are frequently conflated. Many business leaders mistakenly assume these two pathways represent the exact same mechanism. In reality, M&A and IPOs operate under vastly different licensing requirements, regulatory frameworks, operational controls, and market structures.
The primary confusion typically stems from licensing and legal governance. A common misconception is that advising on private business acquisitions requires complex capital market licenses. In truth, Public Capital Markets (PCM) — referring to the public securities market for listed entities — involving IPOs fall under the strict jurisdiction of the Capital Markets and Services Act 2007 (CMSA 2007), regulated directly by the Securities Commission Malaysia (SC) and Bursa Malaysia. Capital market advisory entities executing IPOs must hold a Capital Markets Services Licence (CMSL), while their representative advisors must possess a Capital Markets Services Representative’s Licence (CMSRL).
Conversely, Private Market Transactions (PMT) — referring to direct and confidential private business transactions — which encompass private M&A for Sendirian Berhad (Sdn. Bhd.) private limited companies, require no capital market licensing from the SC. Private M&A is governed primarily under general corporate law via the Companies Commission of Malaysia (SSM) and standard contract law. Adopting private M&A practices should be encouraged, as it offers local business owners immense flexibility for an exit strategy — meaning a structured plan to monetize or transfer business ownership — allowing them to restructure equity or leverage strategic synergies without the heavy burden of prospectus compliance.
Private M&A dealmakers serve as strategic intermediaries in private transactions. A prime example of a local firm specializing in private M&A transactions is ULTRUST Capital Resource Sdn. Bhd. (UCR). UCR acted as the transaction intermediary facilitating the full equity acquisition of a local private institution, Manipal International University (MIU) in Nilai, Negeri Sembilan, which was acquired by Shenzhen International Trade (Hainan) Co. Ltd. and subsequently rebranded to MILA University following Post-Merger Integration (PMI) — meaning the post-deal alignment of corporate operations and culture.
For additional context, a notable real-world example of private M&A includes the merger between telecommunications giants Celcom and Digi, which consolidated into a single operating entity via private deal structuring prior to market disclosures. This process is fundamentally distinct from an IPO.
The structural differences between IPOs and M&A are further highlighted through local corporate case studies:
In the 2024 IPO of 99 Speedmart through 99 Speed Mart Retail Holdings Berhad on the Main Market of Bursa Malaysia, the company raised approximately RM2.36 billion from the Public Market — meaning public and institutional capital pools such as the Employees Provident Fund (EPF / Kumpulan Wang Simpanan Pekerja), Permodalan Nasional Berhad (PNB), and retail investors. The entity transitioned into a Public Listed Company (PLC) — meaning a corporation whose shares are freely and daily traded on an open exchange. Such offerings carry strict Criminal Liability — meaning severe statutory penalties under law — in the event of prospectus misrepresentations approved by the SC.
In contrast, the 2021 distressed M&A — meaning the acquisition of financially troubled assets — involving MCAT Box Office or MBO Cinemas was executed as a Private Asset and Equity Acquisition — meaning an off-market private transfer of business assets and equity. The assets and business operations of MBO Cinemas were purchased directly in the private market by strategic buyers, including Golden Screen Cinemas (GSC) / PPB Group and Lotus Group, during corporate restructuring. This transaction was bound by Civil Liability — meaning legal responsibilities governed by contract law and the Companies Act 2016 — requiring creditor approvals and SSM filings rather than public securities registration.
Ultimately, gaining clarity on the distinctions between M&A and IPOs is vital for business founders and investors alike. Private M&A provides a flexible, confidential, and agile environment for business ownership transfers, whereas IPOs serve as public securities issuance platforms. Demystifying these licensing misconceptions will empower more businesses to leverage M&A for corporate growth.
Credit: Dr. Meor Fazrul
