At Collyer Bristow we have experience of effecting cross border mergers under the Companies (Cross Border Mergers) Regulations 2007.
These mergers may be a convenient way of moving a business from the UK to another EU country, prior to the date on which the UK leaves the EU.
These mergers are a method of combining the business of a UK company with the business of a company in another part of the EU by operation of law. It is a convenient way of transferring assets and liabilities without involving the individual consent of suppliers and customers or other third parties. It can be used to effect an internal group restructuring as well as an arm’s length merger transaction between third parties. The same rules apply whether the transfer of the business is out of the UK or into the UK.
The assets, liabilities and contracts of one company are transferred to the other. At the end of the process the transferor company ceases to exist. In return the transferee may make a payment or issue shares to the members of the transferor company, though no price may need to be paid where other group companies are involved.
The process usually takes about 4-5 months in simpler cases and involves following a similar process in both the UK and the other EU country involved. For this purpose we work closely with an experienced law firm in the relevant country.
The process involves making 2 or 3 separate applications to the UK Court, and we are used to working with a barrister with great experience of the area.
A cross border merger requires the drafting of a terms of merger document together with management reports for both businesses, which must comply with the detailed rules of the Merger Regulations. It takes some time to collect the information required and then prepare the documents, which usually have to be presented in the languages of both countries.
Cross border mergers can be complex procedures, so it is important that companies have a firm grasp on the laws and practices involved, before initiating the process.