Minority Shareholder Protection in Cross-Border Mergers: A Must for or an Impediment to the European Single Market?

Abstract

The main goal of the Cross-Border Merger Directive, adopted in 2005, is to facilitate the mergers of companies registered in different Member States. Therefore, a structure that is highly similar to that of the Third Directive on domestic mergers has been adopted. However, according to Article 4.2 of the Directive, the Member States are free to introduce additional protection mechanisms for minority shareholders opposing the merger. This article discusses whether that provision presents an obstacle to the successful implementation of the Directive and argues that additional minority shareholder protection is indeed necessary, considering the low level of harmonisation among Member States' company law systems.