Thursday 1 February 2018

UK: England and Wales: abuse of law and cross-border mergers

A belated note for the Court of Appeal decision Easynet Global Services Ltd, Re [2018] EWCA Civ 10, on appeal from [2016] EWHC 2681 (Ch). Handed down last month, the principal question was whether the Companies (Cross-Border Mergers) Regulations 2007 applied to a merger involving UK companies and a single Dutch company. The Dutch company was dormant and had never traded, but its inclusion meant that the merger would be a cross-border merger for the purposes of the Regulations (the Regulations implementing the Cross-Border Mergers Directive 2005/56/EC).

At first instance, the trial judge, Birss J., held that the merger did not fall within the Regulations. The cross-border character of the proposed merger was, in his view, "only the result of a device" (para. [20]). The Court of unanimously disagreed: the proposed merger constituted a cross-border merger within the scope of the 2005 Directive and Regulations and did not involve any abuse of law.

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