Directive on Takeover Bids (2004/25/EC)
The 13th Company Law Directive (2004/25/EC, adopted 21.04.2004) regulates bids to take over companies listed on a stock markets. The main goal of the directive is to encourage takeovers in Europe by creating a legal framework for takeover bids, while at the same time providing minimum standards of protection for minority shareholders, and in theory other parties, such as employees.
Basically, the directive has been framed in terms of a capital market standpoint, with a view to making takeovers efficient drivers of value creation. This stance can be contested, however, especially from the employee point of view. According to research, nearly 50 per cent of mergers or takeovers are in the end not efficient (a case in point being Daimler Chrysler). Once a certain percentage of shares in the company are acquired by a specific shareholder, this party is required to make an offer to the remaining shareholders to purchase their shares.
The directive’s main implications for employees are the board’s duty to inform the employees about all the companies involved in the takeover bid, and the right of the employees or their representatives to draft an opinion on it. Consultation of the employees must take place on the basis of the relevant national provisions, especially those deriving from other Council directives, for example, the European works council directive, the Collective redundancies directive, the SE directive and the framework directive on consultation and information.
Links and Documents:
Study on the application of Directive 2004/25/EC on takeover bids
The European Commission has commissioned Marccus Partners and the Centre on European Policy Studies to carry out a study on the functioning of the Takeover Directive. Questionnaires have been sent to experts and different groups, including worker representatives.
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