Merger law

 

Merger law in a business context is the law that regulates the act of two companies or more combining together to become one, by mutual decision, and therefore sharing the risks and rewards of the combined enterprise. Some key distinctions of a merger are when the two companies coming together are owned by shareholders - those holdings will continue on a combined basis and there is no transfer of control. Secondly, significant resources of each of the companies coming together will largely remain unchanged after the merger.

In England and Wales there is no set Act of Law that specifically deals with merger law; instead it is regulated by a whole host of statutory rules and regulations including the City Code on Takeovers and Mergers, also referred to as the City Code, Takeover Code or the Blue Book. The Panel on Takeovers and Mergers is the regulating body which administers the City Code and ensures compliance. Merger law in England and Wales is also regulated by the law of the European Union. The Merger Regulation 139/2004, often referred to as ‘ECMR’, regulates under what conditions companies can merger together.

The thinking behind the European law is ensure that there is fair competition for businesses in the free market and no merged company should have power and control of the market that would ultimately harm the interests of consumers and the economy as a whole. Contravention of the rules and regulations for mergers can lead to vast fines and an order that companies de-merge; and therefore the assistance of expert corporate solicitors should be always be obtained. 

If you would like to obtain some merger advice, then Caven can put you in touch with a local law firm with specialist corporate solicitors free of charge. So if you have any questions or would like our help in finding local corporate solicitors please call us on 08001 221 2299 or complete the web-form above.

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