Cross-border mergers and cross-border takeovers compared

Abstract

The EU rules on cross-border mergers provide a legal framework for the aggregation of firms across the borders of EU Member States (Directive (EU) 2017/1132). These rules are not alone in pursuing this aim, as the takeover bid directive (Directive 2004/25/EC) also contributes to fostering cross-border combinations of European firms. While grounded on comparable regulatory aims, the two set of rules display remarkable differences. These are only in part a direct consequence of the fact that, in cross-border mergers, previously separate companies become a single legal entity, while this is not the case with cross-border takeovers. This chapter offers a comparative analysis of some of these differences and explores their rationale and their consequences on investor protection. The analysis includes the board’s role, shareholder information and collective decision-making, as well as shareholder exit rights.