EU cross-border merger

What is a cross-border merger?

The English implementing Companies (Cross-Border Mergers) Regulations 2007/2974 transposes the European Directive Cross-Border Mergers of Limited Liability Companies (Directive 2005/56/EC).

This allows a transferring company to transfer assets and liabilities to a receiving company without the transferring company having to go through liquidation proceedings. The merger must involve at least one company incorporated and registered in the UK and at least one company incorporated and registered in an EEA state other than the UK for there to be a cross-border merger.

It is also possible for an English Limited Liability Partnership (LLP) to carry out a cross-border merger. The legal basis is Part 10 of the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009, which are certain modifications to Regulation 2007/2974, taking into account the differences in the legal form of the LLP compared to the Ltd. The information given here applies to both companies and LLPs.

The different types of cross-border mergers

(a) Merger by absorption

One or more companies transfer all their assets and liabilities to another, already existing company. Each transferring company is then dissolved without liquidation proceedings.

b) Merger by absorption of a 100% subsidiary

A company transfers all its assets and liabilities to another company which holds all the shares or other securities representing the subscribed capital in the transferred company. The transferring company shall subsequently be wound up without recourse to liquidation proceedings.

c) Merger by formation of a new (receiving) company

Two or more companies transfer all their assets and liabilities to a new company established for the purpose of the merger. The transferring company is then dissolved without liquidation proceedings.

The preparatory requirements for a cross-border merger

A UK merging company must apply to the court (High Court or Court of Session) for an order confirming that the company has properly completed the preparatory measures and formalities.

The court would also, at the request of a creditor or shareholder of the UK merging company, require it to seek the consent of creditors or shareholders to the terms of the merger.

There is an obligation to inform employees of the details and conditions of the merger.

Further obligations may exist depending on the type of merger taking place.

Time schedule of a cross-border merger:

  1. Preparation

– Draft terms of merger
– Draft report of the managing directors
– Expert report

  1. Application to the court to convene a general meeting
  2. Disclosure to Companies House
    (in UK at least 2 months before 5th)

– Date of the general meeting
– Court decision on the convening of the general meeting
– Merger plan
– Application form
– Handing over the report of the managing directors to the employees/employee representatives

  1. Companies House publishes the announcement in the official Gazette
    (in UK at least 1 month before 5th)
  2. General meeting
  3. Application to the Court for a pre-merger certificate

At that time, the procedural requirements from the other EEA States concerned must also be available.

  1. Joint request to the register of the acquiring company to approve the merger
    (in UK at least 7 days before 8th and at least 21 days before 9th)
  2. Registration in the commercial register
  3. Effective date of the merger


DUNAMIS MIND has several years of experience in the supervision of EU cross-border mergers / cross-border mergers with Germany, Austria and Slovenia, in particular also in the cooperation with lawyers and tax advisors who advise the companies based outside the UK. We look forward to discussing your considerations and project requirements in advance.