The Directive on Cross-Border Mergers came into force on 15 December 2005 and will require to be implemented by Member States by 15 December 2007.  The Directive applies to all companies which have a share capital and will mean that as a general rule (although there are some specified exceptions) companies will participate in cross-border mergers in accordance with the laws of the Member State in which they are incorporated.

Despite some criticism of the fact that the text of the original directive has been "watered down", the Directive has been welcomed by the business community as a move which will allow European businesses to be more competitive.  A consultation document on the implementation of the Directive in the UK will no doubt be issued in due course.

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