| Author (Person) | Thomson, Ian | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Publisher | ProQuest Information and Learning | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Title | In Focus | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Details | 9.6.01 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Publication Date | 09/06/2001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Content Type | News, Overview, Topic Guide | In Focus | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
After mounting fears during 2001 that opposition from Germany to aspects of the proposed Takeovers Directive would prevent the adoption of the Directive, there was agreement on a compromise text at a Conciliation Committee on the 5th-6th June 2001. The text needs to be submitted for formal adoption by the Council of the European Union and the European Parliament within the next six to eight weeks. Background The European Commission first presented a 'Proposal for a Thirteenth Council Directive on Company Law concerning Takeover and Other General Bids' in 1988 ( COM (1988)823 final / OJ C64, 14.3.89, p8, with an amended text being produced in 1990 (COM (1990)416 final / OJ C240, 26.9.90, p7).The proposal would create a pan-EU framework for takeovers to give shareholders, who are often located in different member States, a minimum level of protection that is equivalent throughout the EU in the event of a change of control of a company, and to provide for minimum guidelines for the conduct of takeover bids, particularly as regards the transparency of the procedure. The proposal faced objections to some of its detailed provisions in the Council of the European Union and in 1996, following detailed negotiations with the Member States, the European Commission introduced a further 'streamlined framework' version (COM (1995)655 final / OJ C162, 6.6.96, p5). A summary (IP/96/120) and background (MEMO/96/14) to this version is available. The proposal for a framework Directive laid down common principles and a limited number of general requirements which Member States would be required to implement through more detailed rules according to their national practices. A further amended text was introduced in 1997 (COM (1997)565 final / OJ C378, 13.12.97, p10). A summary (IP/97/1022) is available. The full text of the proposal is also available [CELEX Number: 595PC0655] The European Commission argues the objectives of the Directive are:
The German Presidency in 1999 made progress on the proposal a priority and put forward a compromise text. This allowed a political agreement to be adopted by the Council in June 1999, although the formal common position [PDF] was delayed until June 2000 until the resolution of a Anglo-Spanish dispute over the status Gibraltar. The European Commission welcomed the adoption of the Common Position. An excellent detailed account of the history of the proposed Directive is available in the Business Guide to EU Initiatives. The full legislative history of the proposal can be seen in: Also useful is a European Commission background document explaining the objectives of the proposal (MEMO/00/36) The vote in the European Parliament, 13 December 2000 The European Parliament voted on the Council Common Position at its second reading of the proposal on the 13 December 2000. Members of the European Parliament (MEPs) adopted a number of amendments designed to strengthen the hand of companies facing a hostile bid and to strengthen employees' rights with regard to access to information in the event of a bid. The text of the debate leading up to the vote on the amendments is available. The report comprising the Recommendation for the Second Reading from the European Parliament's Committee on Legal Affairs and the Internal Market from which the contentious amendments came is available (PE DOC A5-368/2000). The European Commissioner for the Internal Market, Frits Bolkestein, expressed his disappointment (IP/00/1463) at the vote and felt that adoption of the Directive could be hindered as the Council could well not agree to the amendments adopted by the European Parliament and that the proposal will have to go the Conciliation Committee.
Developments during 2001 In February 2001 the European Commission adopted its formal reaction to the European Parliament vote of December 2000 (COM (2001)77 final (12.2.01). Of the fifteen amendments adopted by the European Parliament, the European Commission accepted three in full and one in part, chiefly concerning the strengthening of the neutrality principle and the length of the transposition period, but rejected the remaining and more significant amendments. In March 2001 the German Government, announced that it would introduce its own clear rules in Germany to deal with hostile corporate battles. In May, under pressure from German industry, the German Government told fellow EU Member States that it was withdrawing its support for the Common Position adopted by the Council in June 2000. The German Government now opposed a central provision of the proposed Directive that would outlaw the use of defensive action by a company's management against a hostile takeover bid. However, at Council meetings in May, it failed to gather support from other Member States and seemingly, has gone along with the compromise text agreed at the Conciliation Committee on 5-6 June 2001. A Conciliation Committee was convened in April 2001 and held a number of meetings. Progress was limited but behind the scenes negotiations brokered by the European Commission finally brought about agreement on a compromise text on the very day, 6 June 2001, when the deadline for reaching agreement was reached. The two key issues, namely defensive measures against hostile takeover bids and the question of workers' rights to information, were settled on the basis of compromise proposals. In addition, the European Commission will set up a 'Group of Company Law Experts' to examine three other contentious issues, which will report by March 2002 (and might lead to follow-up legislative action, if recommended by the Group):
Further information about the compromise agreement agreed at the Conciliation Committee meeting on 5-6 June 2001 can be seen in a European Commission Memo, European Parliament Press Release, Council of the European Union Press Release and Swedish EU Presidency Press Release. Stakeholder and news reaction can be seen in the the links noted below. The European Parliament and Council of the European Union are expected to formally adopt the proposal during July 2001. Member States will have four years to implement the Directive, plus an optional additional year in which Member States would not have to implement Article 9 of the Directive. Further information within European Sources Online: European Sources Online: Topic Guides
European Sources Online: European Voice
Further information can be seen in these external links: European Commission: DG Internal Market
European Parliament: Fact Sheets Germany: The Federal Government United Kingdom: The Takeover Panel FT.com
BBC News:
TOB-EUR-OPA Further and subsequent information on the subject of this week's In Focus can be found by an search in European Sources Online by inserting 'Takeovers' or 'Takeover' in the keyword field. Ian Thomson
Agreement on a compromise text on the takeovers Directive was agreed at a Conciliation Committee on the 5-6 June 2001. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subject Categories | Law |
