European Communities (Cross-Border Mergers) Regulations, 2008

• Jurisdiction: Ireland
• Citation: IR SI 157/2008

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 30th May, 2008.

I, MARY COUGHLAN, Minister for Enterprise, Trade and Employment, in exercise of the powers conferred on me by section 3 (as amended by section 2 of the European Communities Act 2007 (No. 18 of 2007)) of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Council Directive No. 2005/56/EC of 26 October 2005 1 hereby make the following regulations:

PART 1

Preliminary and General

Citation and construction

1. (1) These Regulations may be cited as the European Communities (Cross-Border Mergers) Regulations 2008.

(2) Parts 1 and 2 of these Regulations shall be construed as one with the Companies Acts 1963 to 2006.

Interpretation

2. (1) In these Regulations—

“Act of 1963” means the Companies Act 1963 (No. 33 of 1963);

“common draft terms” means the proposed terms of a cross-border merger drawn up and adopted in accordance with Regulation 5;

“company” means an Irish company or an EEA Company;

“Companies Acts” means the Companies Acts 1963 to 2006;

“Companies Register” means the register of companies maintained by the Registrar in accordance with the Companies Acts;

“cross-border merger” means a merger involving at least one Irish company and at least one EEA company, being—

(a) a merger by acquisition,

(b) a merger by formation of a new company, or

(c) a merger by absorption;

“CRO Gazette” means the Companies Registration Office Gazette maintained by the Registrar pursuant to Regulation 4 of the European Communities (Companies) Regulations 2004 ( S.I. No. 839 of 2004 );

“Directive” means Directive 2005/56/EC on cross-border mergers of limited liability companies 2 ;

“directors’ explanatory report” means a report prepared and adopted in accordance with Regulation 6;

“EEA” means the European Economic Area constituted by the EEA Agreement;

“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993 and any subsequent amendments;

“EEA company” means a limited liability company, within the meaning of Article 2 of the Directive, that is governed by the law of an EEA State other than the State;

“EEA State” means a State that is a contracting party to the EEA Agreement;

“effective date” means—

(a) in relation to a cross-border merger in which the successor company is an Irish company, the date specified under Regulation 14(4), or

(b) in relation to a cross-border merger in which the successor company is an EEA company, the date fixed in accordance with the law of the EEA State concerned for the purposes of Article 12 of the Directive;

“expert’s report” means a report prepared in accordance with Regulation 7;

“First Company Law Directive” means First Council Directive No. 68/151/EEC of 9 March 1968 3 as amended by Directive 2003/58/EC of 15 July 2003 4 ;

“holding company” has the meaning assigned by section 155 of the Act of 1963;

“Irish company” means—

(a) a company within the meaning of the Act of 1963 with limited liability (other than a company limited by guarantee), or

(b) a body corporate with limited liability to which section 377(1) of the Act of 1963 applies;

“Irish merging company” means a merging company which is an Irish company;

“Irish successor company” means a successor company which is an Irish company;

“Irish transferor company” means a transferor company which is an Irish company;

“merger” includes a proposed merger;

“merger by absorption” means an operation in which, on being dissolved and without going into liquidation, a company transfers all of its assets and liabilities to a company that is the holder of all the shares or other securities representing the capital of the first-mentioned company;

“merger by acquisition” means an operation in which a company (other than a company formed for the purpose of the operation) acquires all the assets and liabilities of another company that is, or other companies that are, dissolved without going into liquidation in exchange for the issue to the members of that company, or the members of those companies, of securities or shares in the first-mentioned company, with or without any cash payment;

“merger by formation of a new company” means an operation in which 2 or more companies, on being dissolved without going into liquidation, transfer all their assets and liabilities to a company that they form, the new company, in exchange for the issue to their members of securities or shares representing the capital of that new company, with or without any cash payment;

“merging company” means—

(a) in relation to a merger by acquisition or a merger by absorption, a company that is, in relation to that merger, a transferor company or the successor company; and

(b) in relation to a merger by formation of a new company, a company that is, in relation to that merger, a transferor company;

“Merger Control Regulation” means Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings. 5

“Minister” means the Minister for Enterprise, Trade and Employment;

“pre-merger requirements” means the requirements of Regulations 5 to 13;

“Registrar” means the Registrar of Companies;

“Registry” in relation to an EEA State means the register maintained by that State in accordance with Article 3 of the First Company Law Directive;

“successor company”, in relation to a cross-border merger, means the Irish company or EEA company to which assets and liabilities are to be, or have been, transferred from the transferor companies by way of that cross-border merger;

“transferor company”, in relation to a cross-border merger, means a company, whether an Irish company or an EEA company, the assets and liabilities of which are to be, or have been, transferred by way of that cross-border merger;

“wholly-owned subsidiary”, in relation to a company, means a subsidiary (within the meaning assigned to it by section 155 of the Act of 1963) the entire issued share capital of which is directly or indirectly beneficially owned by the first-mentioned company.

(2) A word or expression used but not defined in these Regulations that is also used in the Directive has the same meaning in these Regulations as it has in the Directive.

Penalties

3. A person convicted of an offence under these Regulations is liable, on summary conviction, to a fine not exceeding €5,000 or imprisonment for a term not exceeding 6 months, or to both.

PART 2

COMPANY LAW PROVISIONS

CHAPTER 1

Preliminary

Definition

4. In this Part “Court” means the High Court.

CHAPTER 2

Pre-merger Requirements

Common draft terms

5. (1) Where a cross-border merger is proposed to be entered into, common draft terms shall be drawn up in writing by all of the merging companies and adopted by the board of directors of each Irish merging company.

(2) The common draft terms of the merging companies shall state, at least—

(a) in relation to each of the transferor companies—

(i) its name,

(ii) its registered office,

(iii) its legal form and the law by which it is governed,

(iv) the register in which it is entered (including details of the relevant State), and

(v) its registration number in that register,

(b) in relation to the successor company—

(i) where the successor company is an existing company, the particulars specified in clauses (i) to (v) of subparagraph (a), or

(ii) where the successor company is a new company yet to be formed, what is proposed as the particulars specified in clauses (i) to (iv) of that subparagraph,

(c) except in the case of a merger by absorption—

(i) the proposed exchange ratio and amount of any cash payment,

(ii) the proposed terms relating to allotment of shares or other securities in the successor company, and

(iii) the date from which the holding of shares or other securities in the successor company will entitle the holders to participate in profits and any special conditions affecting that entitlement,

(d) the likely repercussions of the cross-border merger on employment,

(e) the date from which the transactions of the transferor companies are to be treated for accounting purposes as being those of the successor company,

(f) the rights to be conferred by the successor company on members of the transferor companies enjoying special rights or on holders of securities other than shares representing a transferor company’s capital, and the measures (if any) proposed concerning them,

(g) any special advantages granted to—

(i) any director of a merging company, or

(ii) any person appointed under Regulation 7(2), or under a corresponding provision of a law of an EEA State, in relation to the merger,

(h) the successor company’s articles of association or, if it does not have articles, the instrument constituting the company or defining its constitution,

(i) where appropriate, information on the procedures by which arrangements for the involvement of employees in the definition of their rights to participation in the company resulting from the cross-border merger are determined under Part 3,

(j) information on the evaluation of the assets and liabilities to be transferred to the successor company, and

(k) the dates of the accounts of every merging company which were used for the purpose of preparing the common draft terms.

(3) The common draft terms may include such additional terms as are not inconsistent with these Regulations.

(4) The common draft terms shall not provide for any shares in the successor company to be exchanged for shares in a transferor company held either—

(a) by the successor company itself or its nominee on its behalf; or

(b) by the transferor company itself or its nominee on its behalf.

Directors’ explanatory report

6. (1) The board of...