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Spain

Mergers

Updated 09/2012

Legal requirements

Enterprises are faced with a competitive and changing global market. To take advantage of the opportunities which exist, to position yourself better in the marketplace, you can adopt a number of strategies.

One of them is to join forces or merge with other enterprises. A merger is an economic decision and requires the investment of resources, the aim being to derive profits from the merger in the future.

A union or merger of enterprises may pursue various benefits or goals: achieve a greater size, expand the business, diversify in regional or sectoral terms, acquire a competitive edge, increase efficiency, benefit from complementary aspects of the economic activity of both enterprises, join with another enterprise in the same sector to eliminate competition, among other aspects. The aim is to establish an enterprise which is better positioned in the marketplace.

Corporate mergers are a success if they are well handled at the strategic and operational level. The participants clearly and realistically set: the economic objectives, the investment to be made, the expected benefits and how the two organisations will be integrated.

Mergers may take place between enterprises in one single country, or otherwise across borders. The European Union facilitates the merger of enterprises from different Member States by establishing common rules for all.

Merger of enterprises

In Spain the Commercial Company Structural Modifications Act governs corporate mergers. It also deals with mergers of enterprises from different EU Member States.

The requirements for mergers of enterprises are set out in: the Commercial Company Structural Modifications Act, and in the sectoral legislation applicable to each enterprise.

Merger of enterprises: Classes

A merger is the union or integration of two or more enterprises as one. The enterprise resulting from the merger receives the assets of the previous enterprises. The shareholders of the enterprises which no longer exist receive shares or stock in the company resulting from the merger.

There are various different types of enterprise merger:

A) Mergers of enterprises through the creation of a new company

Different enterprises come together into one new body created for this purpose. The former enterprises disappear. The new enterprise assumes the assets, rights and obligations of the former enterprises. The shareholders become shareholders of the new enterprise.

B) Mergers of enterprises through the takeover of others

One enterprise incorporates and absorbs others. The enterprises performing the takeover continue to exist as such, and maintain their legal personality. The enterprises which are absorbed or subsumed disappear: their assets, rights and obligations become part of the company which performed the takeover.

It is possible that one enterprise could purchase all the stock or a majority share in another enterprise and subsequently merge with it, subsume it.

Enterprise merger process

Persons with a particular interest in the enterprises, for example shareholders, those who have lent money to them, are entitled to be informed of the merger project, to be involved, to protect their interests.

In order to allow these persons to protect their interests, the law governing mergers lays down a set of steps and requirements which must be followed in mergers of enterprises. The website of the enterprises merged and the Companies Register play a key role, announcing the main milestones in the merger process to those with a particular interest.

In order to facilitate corporate mergers and reduce the bureaucracy, the corresponding requirements have been simplified. In particular by means of publication on their corporate websites.

The merger process involves: generation of a joint merger project by both enterprises, separate reports, consideration of the economic situation of the enterprises to be merged. Approval of the merger by the general shareholders' meetings of the merged enterprises. Announcement of the merger agreement allows interested parties to register approval, objections or challenges. Lastly, the public deed of merger is executed.

The merger process is completed with registration of the new company's deed with the Companies Register, or otherwise the required modifications at the subsuming company.

Following this registration the information held in the Companies Register about the companies which cease to exist is cancelled.

For a more detailed insight into the process, consult the following link:

The changes caused by the merger may require that a number of procedures be performed with various public authorities, in a manner similar to the creation of an enterprise or the modification of certain aspects in this regard.

Mergers of enterprises from different Member States of the European Union

In order to facilitate mergers by enterprises resident in different Member States of the European Union, specific regulations have been established. Known as cross-border mergers. To find out about such processes in greater detail, consult the following link

Competition

Competition between enterprises in the marketplace fosters innovation, competitiveness and the emergence of better services and products for consumers. The public authorities guarantee an appropriate level of competition in the market, and fair competition between enterprises.

Enterprises must therefore serve notice on the competition authorities regarding certain actions or circumstances, or receive their authorisation.

At the European level, the Commission is responsible for oversight of competition in operations affecting the EU market. In Spain it is the National Competition Commission which oversees respect for competition at the national level. Certain conglomerations or mergers of enterprises require the notification or authorisation of these authorities. For further information or to perform procedures via the Internet:

Mergers of enterprises following a takeover bid.

One enterprise may purchase another company listed on the stock market. This purchase is performed by means of a takeover bid, in other words a public offer to purchase the securities or shares representing the capital of the company. Those shareholders wishing to accept the offer sell their shares to those presenting the takeover bid.

As a result of a takeover bid one enterprise may acquire some or all of the shares in another. Following this purchase, it may be decided to merge the two enterprises.

In such cases the regulations governing takeover bids and mergers of enterprises play a significant role.

Buying an existing company, with an already established structure, can be a good way of expanding your business.

Administrative procedures

A series of procedures set out in the aforementioned Act must be performed in the process of corporate merger. Some of these are connected with the Companies Register. Others are similar to the procedures involved in setting up other enterprises. In some cases there are required official procedures: competition procedures or those involving the securities markets.

Help & advice

Help & advice

E-mail a business organisation near you

The EU runs a network (Enterprise Europe Network) of local business organisations in most European countries that may be able to help you.

Choose your country and town and enter your enquiry below.

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