The Relationship between Takeover Bids and Mergers: Implications for the Internal Market of the European Union

76 Pages Posted: 30 Oct 2010

See all articles by Thomas Papadopoulos

Thomas Papadopoulos

Department of Law, University of Cyprus

Date Written: October 20, 2009

Abstract

The aim of this article is to examine the relationship between takeovers bids and mergers at EU level, and to discuss the possibility of combining these two methods of EU corporate restructuring within the context of the internal market. A merger can sometimes be the result of a successful takeover bid (i.e. acquisition of the offeree company’s shares and, subsequently, of corporate control), but is more often implemented by one company’s taking over of another, so that the terminating company’s assets and liabilities are transferred as a whole to an existing company, usually designated the continuing company. Combining these two corporate restructuring methods could result in a more effective business consolidation. Takeover bids and mergers fall within the protective scope of the fundamental freedom of establishment (Art. 43 EC Treaty) and of the free movement of capital (Art. 56 EC Treaty). Hence, the conduct of takeover bids and mergers, either separately or in combination, constitutes an exercise of these fundamental freedoms. Such exercise could prove to be beneficial for both EU corporate restructuring and for the strengthening of the EU market in corporate control, which constitutes parts of the internal market. EC market integration regarding corporate restructuring and business consolidation can be achieved only if EU companies enjoy the freedom to choose how and by which means they proceed to those control transactions that they believe to be more appropriate for them.

Keywords: European Union Law, Company Law, Mergers, Takeover Bids, Internal Market, Fundamental Freedoms

JEL Classification: K20, K22

Suggested Citation

Papadopoulos, Thomas, The Relationship between Takeover Bids and Mergers: Implications for the Internal Market of the European Union (October 20, 2009). International and Comparative Corporate Law Journal, Vol. 7, No. 2, pp. 1-19, 2010, Available at SSRN: https://ssrn.com/abstract=1699503

Thomas Papadopoulos (Contact Author)

Department of Law, University of Cyprus ( email )

P.O. Box 20537
Nicosia, 1678
Cyprus

HOME PAGE: http://ucy.ac.cy/dir/en/component/comprofiler/userprofile/tpapad05

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