Directive 2019 /2121 governing cross-border reorganisation operations (mergers, demergers, transfers of registered offices) was implemented during 2023 into the domestic laws of the various countries of the European Union, with the exception of Bulgaria, Cyprus, and Luxembourg. It is time to take stock.
Cross-border mergers, demergers and transfers of registered offices are now subject to a harmonised legal regime and a similar procedure, the purpose of which is to simplify the conduct of these complex operations; However, procedural deadlines have been substantially extended; for example, the period during which the creditors can file an objection has now been extended to three months (e.g. cf. article 126 ter of the directive in the case of mergers). In addition, the pre-merger certificate to be issued by the court, notary or competent authority in the country concerned is now issued within a maximum of three months (this period being extendable) (e.g. cf. article 127 § 7 and 10 of the directive in the case of mergers) and the request for such pre-merger certificate can now only be initiated after the extraordinary general meetings of shareholders approving the draft terms of reorganisation have been held ("within three months of the date of receipt of the documents and information concerning the approval of the cross-border merger" cf. article 127 § 7 of the directive).
The extension of these deadlines is understandable in view of the verifications and investigations to be carried out by the competent authorities concerned in charge of checking the compliance and the legality of the cross-border merger; however, in practice it involves a significant increase in the time needed to complete such operations; In the past, typically it took between 4 and 6 months, whereas it is now more likely to take between 7 and 9 months to complete the corporate steps of such cross-border reorganisations; as a result, operations scheduled for the second half of 2023 had to be postponed until 2024.
By definition and given the recent implementation of the new directive, at this stage, there is no experience as to how exactly this is going to work in practice, and how long these corporate steps will take. Ideally and in order to remain on the safe side, a cross-border reorganisation planned for 2024 fiscal year should in principle be initiated no later than January 2024, so that a detailed timetable can be drawn up summarising the actions to be carried out in the various jurisdictions concerned until the operations are fully completed.
More than ever, the key to successful cross-border operations is foresight.
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