Cross-Border Conversions in the EU: The EU Commission Proposal

In April 2018, the EU Commission presented a Proposal of Directive -amending Directive 2017/1132- on cross-border conversions, mergers and divisions ("The Proposal"). The Proposal lays down common rules and procedures at the EU level on how a company can move from a Member State to another Member State, merge or divide into two or more new companies across borders. This paper addresses this Proposal focusing mainly on the rules on cross-border conversions. After a brief introduction, Section 2 describes the background of the Proposal and analyses some general questions. Sections 3 through 6 examine the different phases in which a cross-border conversion is structured, with particular attention to the safeguards laid down by the Proposal aimed at the protection of minority shareholders, creditors and employees. Finally, Sections 7 and 8 provide a general assessment of the text and a series of conclusions.