1978L0855 — EN — 01.01.1995 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B THIRDCOUNCILDIRECTIVE
of9October1978
basedonArticle 54(3)(g)oftheTreaty concerningmergersofpubliclimited liabilitycompanies
(78/855/EEC)
(OJ L 295, 20.10.1978, p. 36)
Amended by:
Official Journal
No page date
►A1Act of Accession of Greece L 291 17 19.11.1979
►A2Act of Accession of Spain and Portugal L 302 23 15.11.1985
►A3Act of Accession of Austria, Sweden and Finland C241 21 29.8.1994
(adapted by Council Decision 95/1/EC, Euratom, ECSC) L 1 1 1.1.1995
▼B
THIRDCOUNCILDIRECTIVE
of9October1978
based on Article 54 (3) (g) of the Treaty concerning mergers of
publiclimited liability companies
(78/855/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 54 (3) (g) thereof,
Having regard to the proposal from the Commission(1),
Having regard to the opinion of the European Parliament(2),
Having regard to the opinion of the Economic and Social
Committee(3),
Whereas the coordination provided for in Article 54 (3) (g) and in the
general programme for the abolition of restrictions on freedom of
establishment(4) was begun with Directive 68/151/EEC(5);
Whereas this coordination was continued as regards the formation of
public limited liability companies and the maintenance and alteration
of their capital with Directive 77/91/EEC(6), and as regards the annual
accounts of certain types of companies with Directive 78/660/EEC(7);
Whereas the protection of the interests of members and third parties
requires that the laws of the Member States relating to mergers of
public limited liability companies be coordinated and that provisionfor mergers should be made in the laws of all the Member States;
Whereas in the context of such coordination it is particularly important
that the shareholders of merging companies be kept adequatelyinformed in as objective a manner as possible and that their rights besuitably protected;
Whereas the protection of employees' rights in the event of transfers of
undertakings, businesses or parts of businesses is at present regulatedby Directive 77/187/EEC(
8);
Whereas creditors, including debenture holders, and persons having
other claims on the merging companies must be protected so that themerger does not adversely affect their interests;
Whereas the disclosure requirements of Directive 68/151/EEC must be
extended to include mergers so that third parties are kept adequatelyinformed;
Whereas the safeguards afforded to members and third parties in
connection with mergers must be extended to cover certain legal prac-
tices which in important respects are similar to merger, so that theobligation to provide such protection cannot be evaded;
Whereas to ensure certainty in the law as regards relations between the
companies concerned, between them and third parties, and between themembers, the cases in which nullity can arise must be limited byproviding that defects be remedied wherever that is possible and byrestricting the period within which nullification proceedings may becommenced,1978L0855 — EN — 01.01.1995 — 001.001 — 2
(1) OJ No C 89, 14. 7. 1970, p. 20.
(2) OJ No C 129, 11. 12. 1972, p. 50;
OJ No C 95, 28. 4. 1975, p. 12.
(3) OJ No C 88, 6. 9. 1971, p. 18.
(4) OJ No 2, 15. 1. 1962, p. 36/62.
(5) OJ No L 65, 14. 3. 1968, p. 8.
(6) OJ No L 26, 31. 1. 1977, p. 1.
(7) OJ No L 222, 14. 8. 1978, p. 11.
(8) OJ No L 61, 5. 3. 1977, p. 26.
▼B
HAS ADOPTED THIS DIRECTIVE:
Article 1
Scope
1. The coordination measures laid down by this Directive shall
apply to the laws, regulations and administrative provisions of theMember States relating to the following types of company:
— Germany:
die Aktiengesellschaft,
— Belgium:
la société anonyme — de naamloze vennootschap,
— Denmark:
aktieselskaber,
— France:
la société anonyme,
— Ireland:
public companies limited by shares, and public companies limited
by guarantee having a share capital,
— Italy:
la società per azioni,
— Luxembourg:
la société anonyme,
— the Netherlands:
de naamloze vennootschap,
— the United Kingdom:
public companies limited by shares, and public companies limited
by guarantee having a share capital.
— Greece:
η ανώνυµη εταιρία,
— Spain:
la sociedad anónima,
— Portugal:
a sociedade anónima de responsabilidade limitada.
— Austria:
die Aktiengesellschaft;
— Finland:
osakeyhtiö — aktiebolag;
— Sweden:
aktiebolag.
2. The Member States need not apply this Directive to cooperatives
incorporated as one of the types of company listed in paragraph 1. In
so far as the laws of the Member States make use of this option, they
shall require such companies to include the word ‘cooperative’ in allthe documents referred to in Article 4 of Directive 68/151/EEC.
3. The Member States need not apply this Directive in cases where
the company or companies which are being acquired or will cease toexist are the subject of bankruptcy proceedings, proceedings relatingto the winding-upof insolvent comp anies, judicial arrangements,compositions and analogous proceedings.1978L0855 — EN — 01.01.1995 — 001.001 — 3
▼A1
▼A2
▼A3
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▼B
CHAPTER I
Regulation of merger by the acquisition of one or more companies
byanotherandofmerger bytheformationofanewcompany
Article 2
The Member States shall, as regards companies governed by their
national laws, make provision for rules governing merger by the acqui-
sition of one or more companies by another and merger by the
formation of a new company.
Article 3
1. For the purposes of this Directive, ‘merger by acquisition’ shall
mean the operation whereby one or more companies are wound upwithout going into liquidation and transfer to another all their assetsand liabilities in exchange for the issue to the shareholders of thecompany or companies being acquired of shares in the acquiring
company and a cash payment, if any, not exceeding 10 % of the
nominal value of the shares so issued or, where they have no nominalvalue, of their accounting par value.
2. A Member State's laws may provide that merger by acquisition
may also be effected where one or more of the companies beingacquired is in liquidation, provided that this option is restricted to
companies which have not yet begun to distribute their assets to their
shareholders.
Article 4
1. For the purposes of this Directive, ‘merger by the formation of a
new company’ shall mean the operation whereby several companies arewound upwithout going into liquidation and transfer to a comp any thatthey set upall their assets and liabilities in exchange for the issue totheir shareholders of shares in the new company and a cash payment,
if any, not exceeding 10 % of the nominal value of the shares so issued
or, where they have no nominal value, of their accounting par value.
2. A Member State's laws may provide that merger by the formation
of a new company may also be effected where one or more of thecompanies which are ceasing to exist is in liquidation, provided thatthis option is restricted to companies which have not yet begun todistribute their assets to their shareholders.
CHAPTER II
Merger byacquisition
Article 5
1. The administrative or management bodies of the merging compa-
nies shall draw updraft terms of merger in writing.
2. Draft terms of merger shall specify at least:
(a) the type, name and registered office of each of the merging compa-
nies;
(b) the share exchange ratio and the amount of any cash payment;
(c) the terms relating to the allotment of shares in the acquiring
company;
(d) the date from which the holding of such shares entitles the holders
to participate in profits and any special conditions affecting thatentitlement;
(e) the date from which the transactions of the company being
acquired shall be treated for accounting purposes as being those of
the acquiring company;
(f) the rights conferred by the acquiring company on the holders of
shares to which special rights are attached and the holders of secu-rities other than shares, or the measures proposed concerning them;1978L0855 — EN — 01.01.1995 — 001.001 — 4
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(g) any special advantage granted to the experts referred to in Article
10 (1) and members of the merging companies' administrative,management, supervisory or controlling bodies.
Article 6
Draft terms of merger must be published in the manner prescribed by
the laws of each Member State in accordance with Article 3 of Direc-
tive 68/151/EEC, for each of the merging companies, at least one
month before the date fixed for the general meeting which is to decidethereon.
Article 7
1. A merger shall require at least the approval of the general
meeting of each of the merging companies. The laws of the MemberStates shall provide that this decision shall require a majority of notless than two thirds of the votes attaching either to the shares or tothe subscribed capital represented.
The laws of a Member State may, however, provide that a simple
majority of the votes specified in the first subparagraph shall be suffi-
cient when at least half of the subscribed capital is represented.Moreover, where appropriate, the rules governing alterations to thememorandum and articles of association shall apply.
2. Where there is more than one class of shares, the decision
concerning a merger shall be subject to a separate vote by at least
each class of shareholders whose rights are affected by the transaction.
3. The decision shall cover both the approval of the draft terms of
merger and any alterations to the memorandum and articles of associa-
tion necessitated by the merger.
Article 8
The laws of a Member State need not require approval of the merger
by the general meeting of the acquiring company if the followingconditions are fulfilled:
(a) the publication provided for in Article 6 must be effected, for the
acquiring company, at least one month before the date fixed for thegeneral meeting of the company or companies being acquiredwhich are to decide on the draft terms of merger;
(b) at least one month before the date specified in (a), all shareholders
of the acquiring company must be entitled to inspect the documentsspecified in Article 11 (1) at the registered office of the acquiringcompany;
(c) one or more shareholders of the acquiring company holding a
minimum percentage of the subscribed capital must be entitled torequire that a general meeting of the acquiring company be calledto decide whether to approve the merger. This minimum percentagemay not be fixed at more than 5 %. The Member States may,
however, provide for the exclusion of non-voting shares from this
calculation.
Article 9
The administration or management bodies of each of the merging
companies shall draw up a detailed written report explaining the draftterms of merger and setting out the legal and economic grounds forthem, in particular the share exchange ratio.
The report shall also describe any special valuation difficulties which
have arisen.
Article 10
1. One or more experts, acting on behalf of each of the merging
companies but independent of them, appointed or approved by a judi-cial or administrative authority, shall examine the draft terms of merger1978L0855 — EN — 01.01.1995 — 001.001 — 5
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and draw upa written rep ort to the shareholders. However, the laws of
a Member State may provide for the appointment of one or more inde-pendent experts for all the merging companies, if such appointment is
made by a judicial or administrative authority at the joint request of
those companies. Such experts may, depending on the laws of eachMember State, be natural or legal persons or companies or firms.
2. In the report mentioned in paragraph 1 the experts must in any
case state whether in their opinion the share exchange ratio is fair and
reasonable. Their statement must at least:
(a) indicate the method or methods used to arrive at the share
exchange ratio proposed;
(b) state whether such method or methods are adequate in the case in
question, indicate the values arrived at using each such method and
give an opinion on the relative importance attributed to such
methods in arriving at the value decided on.
The report shall also describe any special valuation difficulties which
have arisen.
3. Each expert shall be entitled to obtain from the merging compa-
nies all relevant information and documents and to carry out allnecessary investigations.
Article 11
1. All shareholders shall be entitled to inspect at least the following
documents at the registered office at least one month before the datefixed for the general meeting which is to decide on the draft terms ofmerger:
(a) the draft terms of merger;
(b) the annual accounts and annual reports of the merging companies
for the preceding three financial years;
(c) an accounting statement drawn upas at a date which must not be
earlier than the first day of the third month preceding the date ofthe draft terms of merger, if the latest annual accounts relate to afinancial year which ended more than six months before that date;
(d) the reports of the administrative or management bodies of the
merging companies provided for in Article 9;
(e) the reports provided for in Article 10.
2. The accounting statement provided for in paragraph 1 (c) shall be
drawn upusing the same methods and the same layout as the last
annual balance sheet.
However, the laws of a Member State may provide that:
(a) it shall not be necessary to take a fresh physical inventory;
(b) the valuations shown in the last balance sheet shall be altered only
to reflect entries in the books of account; the following shall never-theless be taken into account:
— interim depreciation and provisions,
— material changes in actual value not shown in the books.
3. Every shareholder shall be entitled to obtain, on request and free
of charge, full or, if so desired, partial copies of the documents referred
to in paragraph 1.
Article 12
Protection of the rights of the employees of each of the merging
companies shall be regulated in accordance with Directive 77/187/EEC.
Article 13
1. The laws of the Member States must provide for an adequate
system of protection of the interests of creditors of the merging compa-1978L0855 — EN — 01.01.1995 — 001.001 — 6
▼B
nies whose claims antedate the publication of the draft terms of merger
and have not fallen due at the time of such publication.
2. To this end, the laws of the Member States shall at least provide
that such creditors shall be entitled to obtain adequate safeguards wherethe financial situation of the merging companies makes such protection
necessary and where those creditors do not already have such safe-
guards.
3. Such protection may be different for the creditors of the acquiring
company and for those of the company being acquired.
Article 14
Without prejudice to the rules governing the collective exercise of their
rights, Article 13 shall apply to the debenture holders of the merging
companies, except where the merger has been approved by a meeting
of the debenture holders, if such a meeting is provided for undernational laws, or by the debenture holders individually.
Article 15
Holders of securities, other than shares, to which special rights are
attached, must be given rights in the acquiring company at least
equivalent to those they possessed in the company being acquired,unless the alteration of those rights has been approved by a meetingof the holders of such securities, if such a meeting is provided forunder national laws, or by the holders of those securities individually,
or unless the holders are entitled to have their securities repurchased by
the acquiring company.
Article 16
1. Where the laws of a Member State do not provide for judicial or
administrative preventive supervision of the legality of mergers, or
where such supervision does not extend to all the legal acts required
for a merger, the minutes of the general meetings which decide on themerger and, where appropriate, the merger contract subsequent to suchgeneral meetings shall be drawn upand certified in due legal form. Incases where the merger need not be approved by the general meetingsof all the merging companies, the draft terms of merger must be drawn
upand certified in due legal form.
2. The notary or the authority competent to draw up and certify the
document in due legal form must check and certify the existence and
validity of the legal acts and formalities required of the company forwhich he or it is acting and of the draft terms of merger.
Article 17
The laws of the Member States shall determine the date on which a
merger takes effect.
Article 18
1. A merger must be publicized in the manner prescribed by the
laws of each Member State, in accordance with Article 3 of Directive68/151/EEC, in respect of each of the merging companies.
2. The acquiring company may itself carry out the publication form-
alities relating to the company or companies being acquired.
Article 19
1. A merger shall have the following consequences ipso jure and
simultaneously:
(a) the transfer, both as between the company being acquired and the
acquiring company and as regards third parties, to the acquiringcompany of all the assets and liabilities of the company beingacquired;1978L0855 — EN — 01.01.1995 — 001.001 — 7
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(b) the shareholders of the company being acquired become share-
holders of the acquiring company;
(c) the company being acquired ceases to exist.
2. No shares in the acquiring company shall be exchanged for shares
in the company being acquired held either:
(a) by the acquiring company itself or through a person acting in his
own name but on its behalf;
or
(b) by the company being acquired itself or through a person acting in
his own name but on its behalf.
3. The foregoing shall not affect the laws of Member States which
require the completion of special formalities for the transfer of certainassets, rights and obligations by the acquired company to be effectiveas against third parties. The acquiring company may carry out these
formalities itself; however, the laws of the Member States may permit
the company being acquired to continue to carry out these formalitiesfor a limited period which cannot, save in exceptional cases, be fixed atmore than six months from the date on which the merger takes effect.
Article 20
The laws of the Member States shall at least lay down rules governing
the civil liability towards the shareholders of the company beingacquired of the members of the administrative or management bodiesof that company in respect of misconduct on the part of members of
those bodies in preparing and implementing the merger.
Article 21
The laws of the Member States shall at least lay down rules governing
the civil liability towards the shareholders of the company being
acquired of the experts responsible for drawing up on behalf of that
company the report referred to in Article 10 (1) in respect of miscon-duct on the part of those experts in the performance of their duties.
Article 22
1. The laws of the Member States may lay down nullity rules for
mergers in accordance with the following conditions only:
(a) nullity must be ordered in a court judgment;
(b) mergers which have taken effect pursuant to Article 17 may be
declared void only if there has been no judicial or administrative
preventive supervision of their legality, or if they have not been
drawn upand certified in due legal form, or if it is shown that thedecision of the general meeting is void or voidable under nationallaw;
(c) nullification proceedings may not be initiated more than six months
after the date on which the merger becomes effective as against theperson alleging nullity or if the situation has been rectified;
(d) where it is possible to remedy a defect liable to render a merger
void, the competent court shall grant the companies involved aperiod of time within which to rectify the situation;
(e) a judgment declaring a merger void shall be published in the
manner prescribed by the laws of each Member State in accordance
with Article 3 of Directive 68/151/EEC;
(f) where the laws of a Member State permit a third party to challenge
such a judgment, he may do so only within six months of publica-
tion of the judgment in the manner prescribed by Directive 68/151/EEC;
(g) a judgment declaring a merger void shall not of itself affect the
validity of obligations owed by or in relation to the acquiringcompany which arose before the judgment was published and afterthe date referred to in Article 17;1978L0855 — EN — 01.01.1995 — 001.001 — 8
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(h) companies which have been parties to a merger shall be jointly and
severally liable in respect of the obligations of the acquiringcompany referred to in (g).
2. By way of derogation from paragraph 1 (a), the laws of a
Member State may also provide for the nullity of a merger to be
ordered by an administrative authority if an appeal against such a deci-
sion lies to a court. Subparagraphs (b), (d), (e), (f), (g) and (h) shallapply by analogy to the administrative authority. Such nullification,proceedings may not be initiated more than six months after the datereferred to in Article 17.
3. The foregoing shall not affect the laws of the Member States on
the nullity of a merger pronounced following any supervision otherthan judicial or administrative preventive supervision of legality.
CHAPTER III
Merger byformationofanewcompany
Article 23
1. Articles 5, 6, 7 and 9 to 22 shall apply, without prejudice to Arti-
cles 11 and 12 of Directive 68/151/EEC, to merger by formation of anew company. For this purpose, ‘merging companies’ and ‘company
being acquired’ shall mean the companies which will cease to exist,
and ‘acquiring company’ shall mean the new company.
2. Article 5 (2) (a) shall also apply to the new company.
3. The draft terms of merger and, if they are contained in a separate
document, the memorandum or draft memorandum of association and
the articles or draft articles of association of the new company shall
be approved at a general meeting of each of the companies that willcease to exist.
4. The Member States need not apply to the formation of a new
company the rules governing the verification of any consideration otherthan cash which are laid down in Article 10 of Directive 77/91/EEC.
CHAPTER IV
Acquisitionofonecompanybyanotherwhichholds90%ormore
ofitsshares
Article 24
The Member States shall make provision, in respect of companies
governed by their laws, for the operation whereby one or more compa-nies are wound upwithout going into liquidation and transfer all their
assets and liabilities to another company which is the holder of all their
shares and other securities conferring the right to vote at general meet-ings. Such operations shall be regulated by the provisions of Chapter II,with the exception of Articles 5 (2) (b), (c) and (d), 9, 10, 11 (1) (d)and (e), 19 (1) (b), 20 and 21.
Article 25
The Member States need not apply Article 7 to the operations specified
in Article 24 if the following conditions at least are fulfilled:
(a) the publication provided for in Article 6 must be effected, as
regards each company involved in the operation, at least one month
before the operation takes effect;
(b) at least one month before the operation takes effect, all share-
holders of the acquiring company must be entitled to inspect thedocuments specified in Article 11 (1) (a), (b) and (c) at thecompany's registered office. Article 11 (2) and (3) must apply;
(c) Article 8 (c) must apply.1978L0855 — EN — 01.01.1995 — 001.001 — 9
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Article 26
The Member States may apply Articles 24 and 25 to operations
whereby one or more companies are wound up without going intoliquidation and transfer all their assets and liabilities to anothercompany, if all the shares and other securities specified in Article 24of the company or companies being acquired are held by the acquiringcompany and/or by persons holding those shares and securities in their
own names but on behalf of that company.
Article 27
In cases of merger where one or more companies are acquired by
another company which holds 90 % or more, but not all, of the shares
and other securities of each of those companies the holding of which
confers the right to vote at general meetings, the Member States neednot require approval of the merger by the general meeting of theacquiring company, provided that the following conditions at least arefulfilled:
(a) the publication provided for in Article 6 must be effected, as
regards the acquiring company, at least one month before the datefixed for the general meeting of the company or companies beingacquired which is to decide on the draft terms of merger;
(b) at least one month before the date specified in (a), all shareholders
of the acquiring company must be entitled to inspect the documentsspecified in Article 11 (1) (a), (b) and (c) at the company's regis-tered office. Article 11 (2) and (3) must apply;
(c) Article 8 (c) must apply.
Article 28
The Member States need not apply Articles 9 to 11 to a merger within
the meaning of Article 27 if the following conditions at least arefulfilled:
(a) the minority shareholders of the company being acquired must be
entitled to have their shares acquired by the acquiring company;
(b) if they exercise that right, they must be entitled to receive consid-
eration corresponding to the value of their shares;
(c) in the event of disagreement regarding such consideration, it must
be possible for the value of the consideration to be determined by a
court.
Article 29
The Member States may apply Articles 27 and 28 to operations
whereby one or more companies are wound up without going into
liquidation and transfer all their assets and liabilities to anothercompany if 90 % or more, but not all, of the shares and other securitiesreferred to in Article 27 of the company or companies being acquiredare held by that acquiring company and/or by persons holding thoseshares and securities in their own names but on behalf of that company.
CHAPTER V
Otheroperationstreated asmergers
Article 30
Where in the case of one of the operations referred to in Article 2 the
laws of a Member State permit a cash payment to exceed 10 %, Chap-ters II and III and Articles 27, 28 and 29 shall apply.
Article 31
Where the laws of a Member State permit one of the operations
referred to in Articles 2, 24 and 30, without all of the transferringcompanies thereby ceasing to exist, Chapter II, except for Article 19(1) (c), Chapter III or Chapter IV shall apply as appropriate.1978L0855 — EN — 01.01.1995 — 001.001 — 10
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CHAPTER VI
Finalprovisions
Article 32
1. The Member States shall bring into force the laws, regulations
and administrative provisions necessary for them to comply with thisDirective within three years of its notification. They shall forthwith
inform the Commission thereof.
2. However, provision may be made for a delay of five years from
the entry into force of the provisions referred to in paragraph 1 for theapplication of those provisions to unregistered companies in the UnitedKingdom and Ireland.
3. The Member States need not apply Articles 13, 14 and 15 as
regards the holders of convertible debentures and other convertible
securities if, at the time when the laws, regulations and administrative
provisions referred to in paragraph 1 come into force, the position ofthese holders in the event of a merger has previously been determinedby the conditions of issue.
4. The Member States need not apply this Directive to mergers or to
operations treated as mergers for the preparation or execution of whichan act or formality required by national law has already been
completed when the provisions referred to in paragraph 1 enter into
force.
Article 33
This Directive is addressed to the Member States.1978L0855 — EN — 01.01.1995 — 001.001 — 11