Cross-Border Mergers After Brexit With Luxembourg

This Q&A considers the potential impact of the UK's departure from the European Union on the use of cross-border mergers.

The Cross-Border Merger Regulations 2007, as amended (SI 2007/2974) (UK Regulations) implemented the Directive 2005/56/ EC on cross-border mergers of limited liability companies (Cross-border Mergers Directive) in the UK (as repealed and codified with effect from 20 July 2017 by Directive (EU) 2017/1132). The UK Regulations establish a framework for cross-border mergers to occur between companies in the UK and companies from other EEA states.

This Q&A attempts to provide a picture of how Luxembourg might allow cross-border mergers with UK companies after Brexit without effecting the statutory merger process under the Cross-border Mergers Directive.

Brexit: cross-border mergers

  1. Do you think UK companies would still be able to carry out cross-border mergers with companies in your jurisdiction after the UK leaves the EU?

    Directive 2005/56/EC on cross-border mergers of limited liability companies (Cross-border Mergers Directive) was implemented into domestic law in Luxembourg by the Law of 10 June 2009 on cross-border mergers (the Cross-Border Mergers Directive having been repealed and codified with effect from 20 July 2017 by Directive (EU) 2017/1132 relating to certain aspects of company law (codification)). Implementation of the Cross-Border Mergers Directive took place via amendment of the Law of 10 August 1915 on commercial companies (Company Law).

    The Luxembourg implementing legislation went beyond the scope of the Cross-Border Mergers Directive, which is limited to cross-border mergers of limited liability companies (today, those types of companies referred to in Article 119 of Directive (EU) 2017/1132, being essentially those listed in Annex II of such Directive).

    Luxembourg law therefore provides for national and cross-border mergers involving any form of Luxembourg commercial company with legal personality and/or Luxembourg economic interest groupings with a foreign company of any form or in any jurisdiction and/or with a foreign law-governed economic interest grouping of any jurisdiction, provided both:

    The national law of the foreign merger participant does not prohibit such a transaction. The foreign merger participant complies with the provisions and formalities of its national law. In addition, any such merger must also comply with Regulation (EC) 139/2004 on the control of concentrations between...

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