246 5 Equity and Shareholders’ Capital
tion,^545 as an SE can be formed by private or public limited-liability companies by
means of a cross-border merger (Articles 2(1), 17, and 32) and an SCE can be
formed through a cross-border merger of existing cooperative sociaties. (d) Public
takeover bids as well as squeeze-out rights and sell-out rights following public
takeover bids are governed by the Directive on takeover bids.^546
The purpose of the regulation of mergers is: to protect the interests of share-
holders; to keep shareholders adequately informed in as objective a manner as
possible; to protect the interests of creditors and persons having other claims on
the merging companies so that the merger does not adversely affect their interests;
and to keep third parties adequately informed.^547
Other questions. In the EU, the regulation of the company law aspects of merg-
ers is complemented by legal instruments that protect the interests of employees,
EU capital markets law, EU merger control, and EU tax law.
EU company law requires the participating companies to disclose how the
merger will affect the position of employees.^548 The protection of employees’
rights in the event of mergers is regulated by many labour law Directives;^549 for
example, they are protected in the event of transfers of undertakings by Directive
2001/23/EC the purpose of which is to ensure the continuity of employment rela-
tionships.^550 Directive 2001/86/EC is designed to ensure that employees have a
right of involvement in issues and decisions affecting the life of their SE.^551 Em-
ployee issues will be discussed in section 12.6 in more detail.
One of the purposes of EU securities markets law is to protect shareholders –
especially minority shareholders – in the context of takeover bids.^552
EU merger control is based on the competition law provisions of the EC Treaty
(Articles 81 and 82) and the EC Merger Regulation. The EC Merger Regulation
applies to the control of concentrations^553 between undertakings.
Mergers have been regulated even by the provisions of EU tax law directives.
According to Directive 90/434/EEC,^554 a merger or division shall not give rise to
(^545) Regulation 1435/2003 (SCE Regulation).
(^546) Article 5(1) of Directive 2004/25/EC.
(^547) Recitals of Directive 78/855/EEC (Third Company Law Directive). See also recitals 2
and 9 of Directive 2004/25/EC (Directive on takeover bids).
(^548) Articles 5(d), 5(j), and 7 of Directive 2005/56/EC (Directive on cross-border mergers);
Articles 20(1) and 32(2) of the SE Regulation.
(^549) Recital 12 of Directive 2005/56/EC (Directive on cross-border mergers) refers to Direc-
tive 98/59/EC (collective redundancies), Directive 2001/23/EC (transfers of undertak-
ings), Directive 2002/14/EC (framework for informing and consulting employees), and
Directive 94/45/EC (European Works Council, procedure for informing and consulting
employees). See also Article 12 of Directive 78/855/EEC (Third Company Law Direc-
tive).
(^550) Article 1 of Directive 2001/23/EC. Case C-458/05 Jouini et al [2007] ECR I-7301, para-
graphs 23–25 and 31–32.
(^551) Recital 21 of Regulation 2157/2001 (SE Regulation).
(^552) Recitals 2 and 9 of Directive 2004/25/EC (Directive on takeover bids).
(^553) Article 3(1) of Regulation 139/2004 (EC Merger Regulation).