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April 25, 2007
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On behalf of the European Company and Financial Law Review and its editors, particularly Marcus Lutter who is unfortunately unable to be with us today, and as editor-in-chief of the ECFR and its parent ZGR, but also as rector of Heidelberg University I welcome all of you at the first ECFR symposium here in Milan. Based on the co-operation with the Revista della Società and the Révue des Sociétés we would like to set up a European-level platform where corporate and capital market lawyers from academia as well as legal practice can exchange ideas, opinions, and arguments. Doing this we aim at taking into account the common internal market on the field of corporate and business law and considerably push ahead its Europeanization.
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April 25, 2007
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It is my honour to welcome you on behalf of ECFR's editors and editorial board to our first symposium on “Cross border business transactions”. My name is Heribert Hirte, professor at the University of Hamburg and managing editor of the ECFR. The ECFR – the European Company and Financial Law Review – was established in 2004. This is still a new journal, and while perhaps no longer a baby, it is certainly not more than an adolescent. Its intention is to address the continuously growing significance of European law, particularly of company law. Let me only mention the European Company (SE) and the Regulation on the Application of International Accounting Standards (IAS), as well as the recent cross border merger directive, on which we will focus upon tomorrow. Nevertheless – as we are not restricted to the body of law created by the European legislature – we must also turn our attention to the “mere” exchange of information on other European jurisdictions, especially in light of famous ECJ cases such as Centros, Überseering and Inspire Art .
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April 25, 2007
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Cross border mergers were in the past consummated as takeovers or mergers of equals through public offers against cash or shares. But in the legal sense they were considered not admissible in Germany. However, since the implementation of the EU-directive on the European company (SE) cross border mergers have become legally available in Germany as an alternative. The author describes the traditional structures for cross border business combination and examines their future in practice. As alternative, the SE-merger and possible models to combine the advantages of the traditional structures and the SE are examined.
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April 25, 2007
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This article focuses on the legal aspects of cross-border mergers. It provides a brief overview of recent milestones, namely the European Company Regulation (SE-Regulation), the ECJ's Sevic judgement and the Cross-Border Mergers Directive (10 th Directive). Based on this overview, and on practical examples, the article analyses the likely evolution of remaining restrictions on cross-border mergers. It concludes with an outlook from a practitioner's perspective.
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April 25, 2007
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The morning session included two presentations addressing the issue of cross-border mergers. Christian Decher focused on mergers between unrelated and/or listed companies and gave an overview of the relevant provisions of the SE-Regulation. Maria Doralt, on the other hand, analyzed both the ECJ's decision in the SEVIC -case (C-411/03) and the 10 th Directive on Cross-Border Mergers. Both speakers highlighted the enhanced flexibility resulting from said developments. Whether the companies will take advantage of these new opportunities remains to be seen. Whereas both speakers welcomed the adoption of those measures set forth by the European legislator, they also stressed potential difficulties in pursuing cross-border mergers in practice.
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April 25, 2007
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The European common legal framework for cross-border mergers and acquisitions is becoming ever clearer. In the light of the principle of freedom of establishment, a cross-border merger can either have the side-effect, or be primarily justified by, the goal of a change of the applicable company laws for one – or some – of the companies participating in the transactions. In this respect cross-border mergers, often driven by substantial economic factors, also become a crucial issue for regulatory competition in European company law. This Article addresses the issue of the protection of minority shareholders who do not consent to the merger (or acquisition), discussing what seems to be one of the most important protections provided under Italian law: withdrawal rights. An analysis of protection of minorities vis-à-vis a change of the applicable company laws, in particular achieved through a merger, is very relevant, but often overlooked, in the discussion on the development of a market for rules in Europe. In fact, the existence and relevance of effective minority protections, such as a withdrawal or appraisal right, contributes to both define the relative attractiveness of the different legal systems from the point of view of the company's stakeholders, and to limit the ability of majority shareholders and/or managers to shop around for the fittest company law system.
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April 25, 2007
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In the beginning of the discussion Dr. Arkadiusz Radwan doubted the conclusions of Prof. Marco Ventoruzzo concerning the European market for corporate charters. He pointed out that the distinction between cost-based and rule-based markets was non dichotomous, as rules are a cost factor too.
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April 25, 2007
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Anglo-American transactional practice has had an enormous influence on deals practice in continental Europe in recent years. Pre-contractual practices and typical contract clauses have been decentrally adopted into European transactional practice on a broad scale. Yet, while continental private practice has widely assimilated Anglo-American transactional concepts terminologically, identity in terminology does not necessarily imply identity in function and meaning. As is well-known from the more general “legal transplant”-literature, function and meaning of foreign concepts can change as they are being integrated into a different legal system, especially where important systemic differences persist. One important difference between the US and continental European dealmaking environments regarding public deals is the degree to which competition for firms, and the idea to subject transactions negotiated with the management of a public corporation to a “market check”, is encouraged by culture and law. Different attitudes towards the balance between the goals of creating a market for firms and of transactional certainty can significantly change the way particular M & A practices work. Against this background, this paper analyzes the adoption of three broadly-used M & A practices into German practice: letters of intent, breakup fees, and material adverse change clauses, and compares their meaning and function in the US and in Germany. It results that important differences persist. In the longer run, the adoption of Anglo-American deals practices may, however, well change the way markets for firms work in Germany.
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April 25, 2007
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Different negotiation styles in the negotiation of complex contracts observed in different cultures reflect both different allocations of responsibility within organizations as well as the degree of trust in the business relationship. Complexity of documentation associates with a low degree of trust and a desire for rent-seeking by the draftsmen. There appear to be inherent inefficiencies that prevent a simpler approach, although such an approach would result in a net benefit both in transaction costs and certainty of execution. Neither the “Harvard” approach to negotiations, nor a low context approach to communication characteristic of some very successful business cultures (e.g. USA or Germany) is universally accepted. Accordingly, however well they (demonstrably) work in a national context, the high-context approaches to negotiation (e.g. Japan or to a lesser extent England) can create risks to a transaction with parties who do not share the same context.
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April 25, 2007
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The fourth panel was devoted to Cross Border Negotiated Deals with Prof. Heike Schweitzer, (EUI, Florence), Hubert Segain (Herbert Smith LLP, Paris) and Christopher C. King (Hunter Douglas Management AG, Rotterdam/Lucerne) as speakers.
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April 25, 2007
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We are at the end of a premiere, and I daresay we should be proud. There are several reasons for this. First, of course, this is the first time that our new law review has gone public, apart from publication. It has done so in a fully international way. Our ECFR European Company and Financial Law Review is the first and only joint venture of the leading company law reviews in Europe, and I am not aware of a similar European enterprise in the whole area of private law. Of course, there are many European law journals that deal with European law or, more specifically, with European company or financial law and have foreign co-editors and contributors. But what the Revue des Sociétés, the Rivista delle Società, and the ZGR have done is different and combines two assets. Each of our company law reviews has a very strong home base, not to mention the premier academic position in the field in our respective countries, and we have joined forces to be truly European. We have done so by way of a joint law review in English, and we are in promising negotiations with Belgium and Spain. The first two annual volumes of the ECFR have been well received by the European public, and the first edition of volume three appeared in March 2006. The review presents a platform for all those who deal with European company and financial law, academics as well as practitioners. In my view, this dialogue between practice and academia is very important; we have more of this in Europe than our American friends, and we should maintain this asset. We consider the ECFR as a means also of influencing the discussion, court practice, and legislation both at the level of the EU member states and at the European level. Joining forces in this endeavor is the only way in which, after some time, we in Europe can meet the Americans at eye level, i.e., presenting a European forum that the Americans simply cannot overlook if they are dealing with European company and financial law.