Infringements of Fundamental Freedoms within the EU Market for Corporate Control
41 Pages Posted: 29 Aug 2012
Date Written: August 28, 2012
This article examines the EU market for corporate control and seeks to identify possible infringements of EU fundamental freedoms, and more specifically of freedom of establishment and of free movement of capital, at this segment of the internal market. This examination will take place in the context of the various financial mechanisms, tensions and clashes of interests within the EU market for corporate control. Takeover bids and the fundamental freedoms are closely related. Since the Takeover Bids Directive is based on the chapter on freedom of establishment (Arts 49 and 50 TFEU-ex Arts. 43 and 44 EC Treaty), it should, in principle, contribute to cross-frontier corporate mobility in the internal market through takeover bids. This was certainly the aim of the European Commission in its various proposals. After analyzing in detail recent tendencies on horizontality, we will then focus on horizontal relationships within the framework of the EU market for corporate control. This is the relationship between the shareholders and the board of the offeree company and the offeror company. This article will scrutinize whether discriminatory and non-discriminatory provisions in the corporate constitution and the defensive conduct of the offeree company’s board against a takeover bid constitute barriers to EU fundamental freedoms. It discusses primarily the extent to which obstacles to cross-border takeovers addressed by the Directive, or indeed left intact by the Directive, are to be regarded as restrictions on the right of establishment stricto sensu, or simply as obstacles in practice to making a successful takeover bid. More specifically, its aim is to analyze the extent to which conduct of the board and articles in the corporate constitution might be said to constitute restrictions on the freedom of establishment and on the free movement of capital.
Keywords: Takeover Bids Directive, freedom of establishment, fundamental freedoms, internal market, market for corporate control, EU law, Company Law
JEL Classification: K22, K20, K29, K39
Suggested Citation: Suggested Citation