Jessica Schmidt of the Bayreuth university wrote a study for the JURI committee, “Cross-border mergers and divisions, transfers of seat: Is there a need to legislate?”
* Although the CBMD has created a legal framework for cross-border mergers which works reasonably well, there are still many problems and difficulties re- maining. The required revision of the CBMD should address in particular the following issues
o extension of the scope to all legal entities within the meaning of Art. 54 TFEU;
o further harmonisation of the rules on creditor protection (ex post protection system);
o harmonisation of minority shareholder protection (exit right against ade- quate compensation and right to get additional compensation in case of an inadequate exchange ratio);
o certain exemptions from the requirement of a merger report;
o harmonisation of the rules on the accounting date and on valuation;
o standard forms for the relevant documentation and communication and in particular also the pre-merger certificate; in addition, possibly also a single language requirement.
* Due to the political sensitivity of the issue of employee protection, this area should be omitted from any short-term revision (and reserved for a general review of the employee protection regimes in the various EU legal acts).
* There is a real and urgent need for a special EU framework on cross-border di- visions. They should generally be governed by rules reflecting those on cross- border mergers; different rules should only apply where the specific character- istics of cross-border divisions so require. The new rules on cross-border divi- sions should be included into the (revised) CBMD.
* There is also a real and urgent need for a special EU framework on cross-border transfers of seat (cross-border conversions). This should be based on the same procedural framework as the CBMD (the so-called ‘Euro- pean model for structural changes’) and included into the (revised) CBMD.
* Hence, the CBMD should be expanded into a real cross-border mobility di- rective, which covers not only cross-border mergers, but also cross-bor- der divisions and cross-border conversions of all legal entities within the meaning of Article 54 TFEU.
De lege lata, EU law provides a specific legal framework only for certain types of cross-border mergers, namely for limited liability companies in the Cross-Border Mergers Directive (CBMD) and for UCITS in the UCITS Directive. Moreover, there is no specific legal framework for cross-border divisions and cross-border transfers of seat, they are only specifically regulated for SEs and SCEs.
The question of a reform of the CBMD and new legislation with respect to cross-border divi- sions and cross-border transfers of seat (cross-border conversions) has been on the EU agenda for quite a while now. The aim of this briefing note is to analyse whether and to what extent there is a need to legislate and to provide recommendations for future legislative measures.
More information: the study