Mergers & Acquisition in UK: Expanding your business with a Cross-Border Merger in the European Union
A merger or acquisition frequently provides the dominant partner with increased traction and market share in its industry sector. During the course of 2016 there were approximately 104 mergers and acquisitions by United Kingdom companies of foreign businesses and around 144 mergers and acquisitions (M&As) of United Kingdom businesses by foreign companies. Any business aiming to expand into the global arena would do well to look at a cross-border merger as its main strategy which might be little complicated.
This is a fact of much understanding that there are far more considerations in a cross-border merger than in a home merger, particularly we take in regard that some employees that are to be re-located to a different country. There is a strict supervisory system to protect all parties involved in a cross-border merger.
- the initial documents have been drafted,
- each party must ensure that they conduct a thorough due diligences exercise before embarking on the project,
- a considerable amount of research into the market,
- the rivals and costs involved should be also be undertaken.
Directive 56/2005 provides the steps to a successful M&A, for limited liability companies based within the EU. The crucial steps that the Directive defines are as follows:
- Draft a complete merger plan which shall include the terms of the merger.
- A report on the management of the companies involved.
- Along with a third party report on the consequences of the merger and its impact on the organisations involved.
- Approval of the terms of the merger by way of a general meeting with both parties to the merger.
With regard to the employee participation rights, it is generally held that the national law of the country in which the new entity is based applies.
When all above are taken care, cross-border M&A will definitely be carried smoothly taking into account the parties are assisted by meticulous professional advisors.