Cross-Border Mergers A Reality

Traditionally, legal mergers between companies from different EU member states have not been possible, even though this has not prevented the use of the word "merger" in various contexts related to cross-border acquisitions. One exception has been the formation of a Societas Europaea (SE) under the European Company Statute where a legal merger across borders within the European Economic Area (EEA) has been achievable. However, this option has, unsurprisingly, been of very limited use in practice. Some member states may also have allowed cross-border mergers under their national law.

The above situation is about to change as the 10th Company Law Directive (2005/56/EU) is being implemented throughout Europe. The Directive facilitates cross-border mergers of national companies, without the need to set up an SE. The scope of the Directive covers various kinds of limited liability companies, including co-operatives. The Directive should be implemented by 15 December 2007.