The Takeover Panel has published a practice statement in response to the Companies (Cross-Border Mergers) Regulations 2007 which come into force on 15 December 2007. The Regulations, which themselves implement the Directive on cross-border mergers (2005/56/EC), aim to put cross-border mergers effected between UK and EEA companies on a statutory footing.
For a merger to be a potentially relevant "cross-border merger" under the Regulations in the first instance, amongst other factors, all of the assets and liabilities of one or more of the transferor companies must be transferred to a transferee company. The practice statement sets out that only certain statutory cross-border mergers will be subject to the Takeover Code (the Code).
Broadly, for a cross-border merger to be subject to the Code, it must satisfy certain specified criteria. In brief, the merger must be between at least one UK company (that is, a company formed and registered in the UK) and at least one company governed by the law of an EEA State (other than the UK). In addition to other qualifying features, the transferor company will generally need to be a company to which the Code would customarily apply.
The Takeover Panel has made it clear that their practice statements are to be treated as informal guidance only and are not binding. As such, the Takeover Panel should be consulted at an early stage to ascertain whether a cross-border merger will qualify as a transaction to which the Code applies.