THE EUROPEAN UNION CROSS-BORDER MERGER DIRECTIVE
The directive deals with mergers in the European Community only
On 20 September 2005, the Council of the European Union has adopted a directive on cross-border mergers of companies aiming at facilitating the carrying-out of cross-border mergers between various types of limited liability companies governed by the laws of different EU Member States. This directive will facilitate the cooperation and consolidation between companies from different Member States by reducing the difficulties encountered, at the legislative and administrative levels, by cross-border mergers of companies in the Community.
The EU Member States shall adapt national laws to comply with the provisions of the new directive within a period of two years. The Netherlands is in the process of adapting such legislation.
The Netherlands Antilles are not part of the EU. This directive and the new Dutch legislation are therefore of no relevance to it.
However, the Netherlands Antilles itself is in a process of restructuring. The Netherlands Antilles consist of five islands: Bonaire and Curaçao (together with Aruba constituting the so-called ABC Islands, or Leeward Antilles, located in the South western Caribbean, near Venezuela).
On 2 November 2006, the Dutch government and the Netherlands Antilles have signed an agreement to restructure the Netherlands Antilles. The parties agreed that the country The Netherlands Antilles (‘het Land de Nederlandse Antillen’) will cease to exist, presumably in 2008 or 2009. Like Aruba, although slightly different, Curacao and St. Maarten will receive the status of autonomous country within the Kingdom of the Netherlands in accordance with referendums held on both islands. Bonaire, St. Eustatius and Saba will each receive the status of Dutch municipalities (a.k.a. Kingdom Island).
As soon as the restructuring has been completed, companies established under the laws of Bonaire, St. Eustatius and Saba may merge cross-border with, e.g., companies established in The Netherlands, simply because by then these islands have become Dutch municipalities.
Currently, under Netherlands Antilles law, a cross-border legal merger is only possible if the acquiring entity is a Netherlands Antilles legal entity and the law governing the foreign legal entity does not prohibit the merger. Hopefully, the directive is only the first step towards cross-border mergers between two countries whether in or outside the European Community.
Karel Frielink
Curacao-based Attorney (lawyer) / Partner
