July 29 2004. Proposals by the European Commission to establish common rules to make cross-border mergers simpler for EU companies have been published.

There are presently no specific procedures under British or European Union law for cross-border mergers. This can lead to long delays for mergers as arrangements are worked out on an individual basis or by dual listing arrangements and take-overs involving companies in complex and costly legal arrangements.

The Cross-Border Mergers Directive aims to create a new legal framework for cross border mergers within the EU, enabling UK companies to engage more easily and with greater certainty in cross-border mergers with companies from other Member States.

The Government is seeking views on the Commission's proposal and, in particular, on the types of company that the proposal should apply to.

The draft Directive contains provisions to deal with employee participation arrangements. It does not impose any new requirements where participation does not already exist in at least one of the companies involved. The consultation closes on 20th September 2004.