24 March 2015
The European Commission has recently consulted with stakeholders on the operation of the existing EU legal framework for cross-border mergers. The consultation focused on possible improvements to the existing regime for cross-border mergers and the potential implementation of a framework for cross-border divisions.
The 2012 EU Action Plan on Company Law and Corporate Governance outlined how the existing Cross-border Mergers Directive has been a big step forward for the cross-border mobility of companies. However, it also highlighted a number of areas where the operation of the Directive could be enhanced to meet the changing needs of the single market. These include the scope of the Directive and the transactions covered (including the possibility of a harmonised fast track procedure), the rules on creditor and minority shareholder protection and the valuation of assets.
The consultation sought to gather stakeholders’ opinions on the following issues:
While national rules in relation to divisions have been harmonised at EU level since 1982, no EU legal framework currently exists for cross-border divisions. Consequently, companies wishing to undertake a cross-border division are required to engage in a series of steps, such as a national division and a cross-border merger or the creation of a subsidiary and a subsequent transfer of assets.
The Action Plan suggested that a framework for cross-border divisions could be accommodated in a re-working of the existing Directive. The Commission believes that as the existing Directive is well known to stakeholders, it would provide a tested framework for other cross-border restructurings such as divisions.
The Consultation closed on 1 December 2014 and the results have not yet been published.