18 November 2003 19:08 [Source: ICIS news]
LONDON (CNI)--The European Commission (EC) on Tuesday proposed a directive to make cross border mergers in the European Union (EU) easier by overcoming obstacles caused by different national laws.
Under the directive, such mergers would be governed by the principles and rules applicable to “domestic" mergers, explained the EC.
As EU law now stands, cross-border mergers are possible only if the companies wishing to merge are established in certain member states. In other member states, the differences between the applicable national laws are such that companies wanting to merge have to resort to complex and costly legal arrangements.
The EC said that the new directive will help small and medium-sized businesses which want to operate in more than one EU member state in particular.
Internal Market Commissioner Frits Bolkestein commented: "Making cross-border mergers easier is an important tool to facilitate the co-operation and restructuring necessary to make Europe more competitive. Currently, cross-border mergers are difficult or impossible and this proposal aims to put that right.”
He continued: “At the same time, it is important to ensure that there are safeguards to prevent the abuse of cross-border mergers as a means for companies to circumvent worker participation obligations at national level.
Bolkestein stressed: “Swift adoption is especially important as enlargement will make it even more important for companies to be able to cooperate across borders."
The directive will be submitted for adoption under the so-called “co-decision” procedure to the EU's Council of Ministers (subject to qualified majority voting) and the European Parliament.
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