Cross-border Mergers, the Rule of Reason and Employee Participation

Abstract

This contribution discusses cross-border mergers in the context of freedom of establishment and the major exeption to this fundamental principle of the EC Treaty, the so-called rule of reason. It does so in the light of the judgment of 13 December 2005 by the European Court in Sevic, Directive 2005/56/EC on cross-border mergers of limited liability companies, as well as with respect to cross-border mergers outside the scope of this directive. The contribution then turns to employee participation, which poses the most delicate problem in relation to cross-border mergers. In particular, it examines the impact of freedom of establishment and the rule of reason on rules and bahaviour aimed at protecting employee participation and thereby impeding cross-border mergers.