Introduction

The Cross-border Merger Directive has, for the most part, been implemented in Malta by virtue of subsidiary legislation, entitled the Cross-border Mergers of Limited Liability Companies Regulations (Legal Notice 415 of 2007), (the ‘Company Regulations’), which entered into force on 15 December 2007.

Scope of rules

There are three types of cross-border merger mechanisms contemplated by the Company Regulations (Reg. 3(4) (a), (b) and (c) Company Regulations). They may be categorised as follows:

1. merger by acquisition: where one or more companies, on being dissolved without going into liquidation, transfer all their assets, rights, liabilities and obligations to another existing company in exchange for the issue to their members of securities or shares representing the capital of that company. A cash payment may also constitute part of the consideration for such type of cross-border merger (see no. 6 of this chapter);

2. merger by formation: where two or more companies, on being dissolved without going into liquidation, transfer all their assets, rights, liabilities and obligations to a newly formed company in exchange for the issue to their members of securities or shares in that newly formed company. A cash payment may also constitute part of the consideration for such type of cross-border merger (see no. 6 of this chapter); and

3. merger by absorption: where a company, on being dissolved without going into liquidation, transfers all its assets, rights, liabilities and obligations to the company holding all the securities or shares representing its capital.