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As a partner/owner of a commercial company, you are surely analyzing new business opportunities that can increase the market power of your company, in the event that this is the reason for your search. 

Or perhaps that business need is more closely related to obtaining new resources and synergies.

Acquiring differential advantages over your competition, developing new products more efficiently or reducing production or distribution costs, may be what you really consider necessary for your company.

In any case, any of these benefits that you consider highly relevant and that your company needs to include in a not too long period of time, constitute the effects resulting from a merger with another existing entity or its absorption.

Company Mergers

The merger of companies can be analyzed as a great business opportunity, especially for those companies whose productive and commercial systems are complementary to each other.

The degree of convenience increases when tax incentives can be obtained through the existence of exemptions or rebates. Also, a business merger may be the only way to enter a country with strong trade barriers.

SEGOVIA CONSULTING

Companies in the EU 

If your company's registered office is within the European Union, there are rules that must be applied, in reference to capital companies, for certain cases of merger with another EU company.

If your entity transcends the borders of the European Union and contributes capital from private or public investors, these cross-border mergers are exempt from the application of European rules on business mergers.

If cross-border mergers take place between cooperative societies, EU countries can decide not to implement them.

But what are these rules and in what cases of merger are they applied?

Compliance with the regulations is subject to the presentation of a Common Merger Project, as well as its publication on the websites of each relevant company. The preparation of the Reports for the General Meetings, the approval of the Merger Project and its legal verification, must be verified in each country involved by the competent authority.

These rules will be put into practice in the cases of Merger by Acquisition operations, in those related to Mergers by Constitution, and when a company transfers all its assets and liabilities to another company that already owns all of its titles, that is, in those situations of Merger by Absorption.

If this article is of interest to you, at Segovia Consulting we work on all phases of the Business Merger process, creating a solid and precise strategy according to each case.

All you have to do is come in here and tell us about your situation so we can start working on it.

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