Commission proposes new takeovers Directive
The Commission has now issued a new
draft Directive on takeover bids, which would give information and consultation
rights to employees and their representatives in the companies
involved.
The Commission issued its new draft Directive
on company takeover bids on 2 October 2002. A compromise text of the previous
draft had been agreed by the European Parliament (EP)/Council of Ministers
conciliation committee in June 2001, but was rejected by Parliament's plenary
session in July 2001 (EP rejects takeovers
Directive) causing the whole proposal to fall.
After convening a group of high-level company
law experts to examine the issue () and considering this group's January 2002
report, the Commission has now started the legislative procedure again. Its new
proposal seeks to meet the EP's concerns without compromising the basic
principles approved unanimously by the Council of Ministers in its common
position on the previous proposal. Alongside matters such as defensive measures
against takeover bids, the issues that concerned Parliament included a
perceived lack of protection for the employees of companies involved in a
takeover bid. The Commission has thus, along with various other changes,
strengthened the employee information and consultation provisions in the new
draft Directive.
The main information and consultation provisions of the new
draft Directive are as follows:
as soon as a takeover bid is made public, the boards of
the 'offeree' (ie target) company and of the 'offeror' company (ie the bidder)
must inform the representatives of their respective employees or, where there
are no such representatives, the employees themselves;
offeror companies must draw up and make public in good
time an offer document. When this is made public, the boards of the offeree
company and of the offeror company must communicate it to the representatives of
their employees or, where none exist, to the employees themselves;
the offer document must contain information on the
offeror's intentions with regard to: the future business of the offeree company
and, in so far as it is affected by the bid, the offeror company; and
safeguarding the jobs of employees and management, including any material change
in the conditions of employment;
member states must provide for the disclosure of all
information or documents related to the takeover in such a manner as to ensure
that they are "both readily and promptly available" to the representatives of
the employees of the offeree company or, where none exist, to the employees
themselves;
the offeree company's board must draw up and make
public a document setting out its opinion on the takeover bid, together with the
reasons on which it is based, including its views on the effects on all the
interests of the company, including employment, and on the offeror's strategic
plans for the offeree company and their likely effects on employment and the
locations of the company's places of business (as set out in the offer
document). The board of the offeree company must at the same time communicate
this opinion to the representatives of its employees or, where none exist, the
employees themselves. Where the offeree company's board receives in good time a
separate opinion from the employee representatives on the bid's effects on
employment, this opinion must be appended to the board's own document; and
without prejudice to the provisions of the proposed
takeovers Directive, the provision of information to, and consultation of,
representatives of the employees of the offeror and offeree company shall be
governed by the relevant national provisions, and in particular those adopted
pursuant to the EU Directives on European Works Councils (94/45/EC), collective
redundancies (98/59/EC) and national information and consultation rules
(2002/14/EC).
The draft Directive suggests an implementation date of January
2005. It is subject to the codecision procedure between the EP and the Council,
and the next stage is thus an opinion from the EP.
