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THE EUROPEAN UNION
Brussels, 20 September 2005
12482/05 (Presse 238)
Adoption of a directive on cross-border mergers
in the European Union
The Council adopted today a directive on cross-border mergers of companies
aiming at facilitating the carrying-out of cross-border mergers between various
types of limited liability companies governed by the laws of different
Member States of the European Union (PE-CONS 3632/05, 11444/05 and
11444/05 ADD1). The directive was adopted at first reading under the
This directive will facilitate the cooperation and consolidation between
companies from different Member States by reducing the difficulties
encountered, at the legislative and administrative levels, by cross-border
mergers of companies in the Community. It is expected to reduce costs of such
operations, while guaranteeing the requisite legal certainty and enabling as
many companies as possible to benefit. This Directive constitutes an important
step towards the EU's efforts in taking forward the Lisbon strategy.
The key features of the agreed text are:
- The directive will apply to mergers of limited liability companies, as
defined in this Directive, formed in accordance with the law of a Member State
and having their registered office, central administration or principal place of
business within the Community, provided at least two of them are governed by the
laws of different Member States.
- The directive provides for the possibility for Member States to apply
certain provisions and formalities applying to domestic mergers to transnational
mergers in a manner which takes into account the cross-border nature of such
mergers. In addition, Member States will have the possibility to adopt specific
provisions regarding the protection of minority members of a merging company,
who have opposed the cross-border merger.
- The establishment of a minimum content of the common draft terms of
cross-border merger for each of the companies concerned in the various Member
States while leaving the companies free to agree on other items.
- The principle that the common draft terms of cross-border merger must be
approved by the general meeting of each of those companies.
- The monitoring of the completion and legality of the decision-making process
in each merging company must be carried out by the national authority having
jurisdiction over each of those companies, whereas monitoring of the completion
and legality of the cross-border merger should be carried out by the national
authority having jurisdiction over the company resulting from the cross-border
- On the key issue of employee participation rights, the general principle is
that the national law governing the company resulting from the cross-border
merger will apply. As an exception to this general principle, the principles and
procedures concerning employee participation laid down in the European company
(SE) Regulation and
Directive should apply
if at least one of the merging companies has an average number of employees in
the six months before the publication of the draft terms of the cross-border
merger that exceeds 500 and is operating under an employee participation system,
or where the national law applicable to the company resulting from the
cross-border merger does not
- provide for at least the same level of participation as operated in
the relevant merging companies, measured by reference to the proportion of
members of the administrative or of the supervisory organ or their committees or
of the management group, which covers the profit units of the company, subject
to employee representation, or
- provide for employees of establishments of the company resulting from the
cross-border merger and situated in other Member States the same
entitlement to exercise participation rights as is enjoyed by those employees
employed in the Member State where the registered office of the company
resulting from the cross-border merger is situated.
for the application of the European Company standard rules will be 33 1/3% of
the total number of employees in all merging companies that must have operated
under some kind of employee system.
Another important provision aims at protecting employees' rights in
subsequent domestic mergers for a period of three years after the cross-border
merger has taken effect.
Member States will dispose of a period of two years to adapt national
laws to comply with the provisions of the new directive.
 The Italian delegation
 Among other, this
provision of the Directive includes the application of standard rules for
employee participation of Part 3 of the Annex to the SE Directive.