Home / Droit des sociétés et gouvernance / Company Law / Cross Border Mergers

Directive on cross-border mergers of limited liability companies (2005/56/EC)

The cross-border merger (or CBM) directive was adopted by the Council of Ministers on 26 October 2005. The main objective of the directive is to make it easier to merge companies across European borders. It should be noted that the worker involvement provisions in the directive are weaker than those provided by the European Company (SE) legislation.

As was the case for the European Company (SE), the question of how to protect existing employee rights to board-level representation was quite controversial and made agreement on a directive difficult. The solution which was found is substantially based on the negotiating model found in the SE Directive. If one of the merging companies had representation for employees at board level, there are to be negotiations with management on the same basis as for an SE. Employees can demand the same rights at board level as existed previously in one of the merging companies – although, where there is a one-tier board structure with a single board of directors, the proportion of employee members can be restricted to one-third of the total.

The CBM however provides lower standards for worker involvement than is the case in the SE directive. The threshold for an automatic right for employees to have board-level representation is when at least one-third of employees previously enjoyed these rights, as opposed to 25 percent in the case of the SE. Furthermore, no provision is contained for the creation of a cross-border information and consultation body, as is the case in the SE directive.

An important consequence of both the mergers and SE Directives is that employee representatives on company boards will in future come from several Member States. This presents both a challenge and an opportunity.

Documents / Links

Implementation Study on Cross-Border Mergers released

The European Commission has just released an external study on the implementation of the Cross-Border Mergers Directive (CBMD) in the EU and EEA Member States. While the study claims that the CBM Directive is a success overall, nevertheless further policy actions are needed. With regard to employee participation, the study identifies a number of problems and outlines some options to deal with these.

more ...

Countries

In this section you can find information on the transposition of the 10th Company Law Directive in different EU member states.

The transposition into German law of the 10th Directive on cross-border mergers of companies with share capital Germany The Transposition of 10th Directive on crosskl.pdf 65,15 kB

Dr Roland Köstler, Hans Böckler Foundation (September 2007)

Transposition of the Cross-Border Mergers Directive. Notes from Sweden. 10th Diretive Sweden.pdf 85,33 kB

Dr Bernard Johann Mulder, LL.D., Senior Lecturer at Växjö University and Senior Researcher at Lund University. Master of Laws and Niklas Selberg, LL.M., doctoral candidate at Lund University

Estonia - Report on the transposition of the cross border merger directive into national law 10th Directive Estonia.pdf 42,09 kB

Dr. Merle Muda, Faculty of Law - University of Tartu

Transposition into Maltese Law of Directive 2005/56/EC on Crossborder Mergers of Limited Companies 10th Directive Malta.pdf 37,34 kB

Saviour Rizzo, Centre for labour studies, University of Malta

Transposition of the Directive on Crossborder Mergers into Slovakian Law 10th Directive Slovakia.pdf 55,90 kB

Dr Dagmar Zukolova

Austria - Transposition of the Directive on Cross-Border Mergers 10th Directive Austria.pdf 40,88 kB

Walter Gagawczuk and Helmut Gahleitner, Arbeiterkammer Wien

The transposition into Norwegian law of the 10th Directive on cross-border merges of companies with share capital Cross-border_Norway_final.pdf 45,12 kB

Inger Marie Hagen, Fafo Institute for Applied Social Science (Oslo)

The Transposition in Denmark of the 10th Directive on cross-border Mergers 10th Directive Denmark.pdf 46,63 kB

Herman Knudsen, Aalborg University

Transposition of Art. 16 of the Directive on Cross-Border Mergers into Polish Law 10th Directive Poland_final.pdf 40,75 kB

Dr Dagmara Skupień, University of Lodz, Faculty of Law and Administration

The Transposition of the 10th Directive on Cross-border Mergers in Hungary Cross-border_Hungary.pdf 53,37 kB

László Neumann, National Employment Office, Research Unit (Budapest)

IRELAND: Transposition law Cross Border Mergers SI no157 May08.pdf 183,67 kB

The Cross Border Mergers Directive was transposed into Irish law at end- May by Regulation (SI No. 157 of 2008). It follows very closely the Directive.

Malta: Transposition into Maltese Law of Directive 2005/56/EC on Cross-Border Mergers of Limited Companies Malta_Cross_Border_Merger_final.pdf 31,23 kB

by Saviour Rizzo, September 2008

FAQ 

Frequently Asked Questions on the 10th Directive in ENGLISH and GERMAN