Mergers and Spin-Offs: Clarifying and Simplifying Procedures

By Manuel João Pita, MLGT Madeira – Management and Investment, S.A. (27/02/2010)

The legal regime applicable to mergers and spin-offs in Portugal has undergone recent changes that have improved and modernised the respective process of implementation. In fact, during 2009 two major documents (one law and one decree-law) were published with the aim of rationalising and simplifying the process of corporate restructuring, whether considered on a national level or under the specific circumstances that involve a cross-border operation.

On 12 May 2009, Law n.19/2009 amended the Portuguese Companies Code and the Commercial Registry Code by adapting Directive n.2005/56/EC of the European Parliament and of the Council of 26 October 2005 to the national law regarding cross-border mergers of limited liability companies, as well as adapting Directive 2007/63/CE of the European Parliament and of the Council of 13 November 2007, which calls for an independent expert’s report on a merger or spin-off of public limited liability companies and provides for an employee participation regime in the merger operation.

In general terms, the amendments adopted were implemented to simplify formal cross-border merger and spin-off procedures on the one hand, and to increase employee participation in such procedures on the other.

Regarding the formal procedures, s

everal amendments were inserted into the Companies Code and the Commercial Registry Code, pertaining to companies set up in Portugal involved in cross-border mergers, namely: