The position of the employee in the takeover bids directive and the directive regulating the cross-border mergers of companies

Abstract

The dissertation seeks to discuss the status of the employee as per Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids - the Takeover Bids Directive - and what was originally Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies - the CrossBorder Mergers Directive - now codified into Directive 2017/1132 which has, more recently, been amended by Directive 2019/2121. Further to a general overview of the two directives, the employee’s position in takeover bids is explained. The rationale behind the provisions is discussed; followed by an explanation of the obligations on information disclosure information concerning bids, and the offeree company board’s obligations. Two case studies concerning the controversial takeover of Cadbury by Kraft and Telenet takeovers are cited. With respect to cross-border mergers, firstly, the challenge posed by divergent customs within the European Union is highlighted. The relevant provisions lay down obligations, inter alia, on allowing for employee participation rights and information and consultation rights. A number of examples of cross-border mergers are discussed. A comparative analysis of the provisions is carried out, comparing and contrasting them with legislation in a number of third countries including the United States. The dissertation’s conclusions propose possible future amendments to both Directives.