Brussels, 10 May 2005
Commissioner Charlie McCreevy welcomes today’s vote in the European Parliament on the proposed 10th Company Law Directive on cross-border mergers of limited liability companies. He said: “The cross-border Directive opens new ground. It is a major step in favour of EU businesses, which have been calling for the adoption of this text for many years. This is true, in particular, of those mid-sized businesses which are active in more than one Member State, yet too small to form European companies. With this Directive, European companies will be able to organise themselves and develop efficiencies on a cross-border basis, and further reap the benefits of the Single Market.”
This key measure will allow cross-border mergers of limited liability companies in the European Union. The Directive sets up a simple legal framework avoiding the winding up of the acquired company.
The directive covers all limited liability companies, with the exception of undertakings for collective investment in transferable securities (UCITS). The text contains special provisions as regards cooperative societies. Given the very diverse types of cooperatives in the EU, Member States have the possibility to exclude them from taking part of cross-border mergers for a limited period of five years and under the control of the European Commission.
Employee participation was a key issue in the negotiations, given the widely diverging systems in force in the Member States. This raises the question of how to deal with cross-border mergers implying a loss or a reduction of employee participation. The Parliament agreed that employee participation schemes should apply to cross-border mergers where at least one of the merging companies is operating under an employee participation system. Employee participation in the newly created company will be subject to negotiations based on the model of the European Company Statute.