Reviewing the Implementation of the Cross-Border Mergers Directive

Abstract

This chapter reviews the implementation of the Cross-border Mergers Directive (hereinafter, “CBMD”). The findings and experiences from the transposition of the CBMD into national company laws are examined. This chapter scrutinizes the most important parts of the “Study on the Application of the Cross-Border Mergers Directive” (hereinafter the ‘Study’) prepared by Bech-Bruun and Lexidale for the European Commission. Other studies and reports scrutinizing the implementation of the CBMD are also considered carefully. This chapter seeks to identify the advantages and the disadvantages, which are revealed from the implementation of the CBMD. After a discussion of the main benefits of the CBMD, an article-by-article analysis of the Directive reveals the disadvantages and proposes certain reforms. The main provisions of the CBMD, which are characterized by certain problems and deficiencies, concern: its scope, conditions relating to cross-border mergers, available company types, cash payment, creditor protection, protection of minority shareholders, procedural issues, national competent authorities, pre-merger certificate and scrutiny of the legality of the cross-border merger, registration, consequences of the cross-border mergers, simplified formalities and employee participation. Special emphasis is also given on certain important aspects of the CBMD, such as spillover effects on other areas outside the CBMD and cross-border seat transfers through cross-border mergers. Apart from the amendments already adopted, the Proposal for a Directive amending Directive 2017/1132 as regards to cross-border conversions, mergers and divisions, which proposes further amendments to the CBMD, is also explained. A few concluding remarks are deduced.

Keywords: Cross-border Mergers Directive, 10th Company Law Directive, European Company Law, Harmonization of company law, Mergers and Acquisitions, M&As

JEL Classification: K22, K23