Amendment merger and division procedure

Wednesday 22 June 2011

The proposed amendment of the Dutch legislation with respect to the reporting and documentation requirements for merger and division procedures will come into force as of July 1, 2011.

The proposed amendment of certain articles of Book 2 of the Dutch Civil Code (“DCC”) is required to comply with Directive 2009/109/EG. The purpose of the amendment is to reduce the administrative burdens on companies in the case of mergers and divisions and at the mean time safeguard the interest of other stakeholders.

As an example of the upcoming changes, under the current legislation the managing bodies of each of the merging companies shall draw up a detailed written report explaining the draft terms of merger and setting out the legal and economics grounds. This shall no longer be required if all the shareholders and the holders of other securities agree.

Another amendment is that it shall no longer be required to publish an auditors statement if the company publishes a half-yearly financial report in accordance with article 5:25d of the Financial supervision act (Wet financieel toezicht).

Also if the shareholders of the company which is being absorbed or divided in a transaction, will own shares in the in the surviving or newly established company in a proportion equal to their existing shareholding, some provisions of the DCC will not be applicable to reduce the costs and the administrative burdens. 
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