Commission to legislate to cut merger red tape

25 September 2008 13:33  [Source: ICIS news]

PARIS (ICIS news)--The European Commission proposed legislation on Thursday to reduce the amount of red tape faced by European public-limited companies wanting to merge.

Under the proposal, companies wanting to merge - or divide - would benefit from simplified requirements on reporting and on publication of draft terms, thereby reducing the cost of merger activities.

The proposal would be welcomed by the chemical industry, which is concerned that if the global financial crisis continues, mergers and acquisitions could become too expensive and plans for expansion would have to be put on hold.

The Commission hoped through this and other proposals made in March 2007 and April 2008 to reduce administrative burdens on EU companies by 25% by the end of 2012 and save €1bn ($1.5bn) a year.

“The directives that we want to modify date back about 30 years,” said Charlie McCreevy, internal market commissioner.

“If we want to keep administrative burdens for EU companies to a minimum we must make sure that these rules are brought in line with today's technological possibilities and business processes,” he added.

($1 = €0.68)

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By: Philippa Jones
+44 20 8652 3214

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