Cross-border mergers : an overview of the corporate aspects involved and arguments for the introduction of legislation in Malta

Abstract

This thesis proposes to identify the main issues which should be taken into account in legislating on cross-border mergers in Malta. It does not, however, enter into issues of competition law, it being intended as an overview of company law aspects of cross-border mergers and related labour law issues. To begin with, after a brief introductory chapter we shall tackle the desirability of legislation which envisages cross-border mergers in Malta. A cross-border merger represents, for an undertaking, a mode of entry into the economy of another state. Consequently, a cross-border merger has diverse effects on the economy of the host-state. These effects, positive and negative, will be discussed in Chapter 2, and will be tackled both generally and with particular reference to Malta. A merger is a process which once complete brings about a mutation of the status of the company. Such mutation may have effects on various parties, and such effects are not limited merely to positive effects. The purpose of legislating upon the merger process, is to provide adequate safeguards against such negative effects on all interested persons involved, including shareholders, creditors and employees. In a cross-border merger, the merger process has to provide for additional . safeguards that are rendered necessary by the presence of the international element. These questions are tackled in Chapters 3 and 4 of this dissertation. There is a lot of controversy regarding the measure of protection which should be afforded to employees and their existing position within the company, as far as concerns participation in its running, and relations with management. It is, in fact, issues of employee participation which have been the main stumbling block as far as the adoption of the draft Tenth Directive on cross-border mergers, in the EU, is concerned. In Chapter 5, therefore, we shall be examining the changes which may occur as a result of a cross-border merger in the relations between the management of a company and the company's employees, as well as the question of employee participation in the EU. This question will be once more addressed in Chapter 6 which will be concerned with present trends and the future developments they anticipate. In this chapter, basing ourselves on the points made in and the conclusions drawn from the previous chapters, we shall also examine various considerations to be dealt with in any future Maltese legislative project envisaging cross-border mergers and the presence of foreign companies in Malta.