Olympus UK Ltd & Ors
2014
CHANCERY DIVISION
United Kingdom
CORAM
- THE HONOURABLE MR JUSTICE HILDYARD
Areas of Law
- Corporate Law
- Conflict of Laws
- Commercial Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
This case involves applications under the Companies (Cross-Border Mergers) Regulations 2007 about cross-border mergers of wholly-owned subsidiaries of the Olympus Corporation. The key issue was whether shareholders in the transferor company could waive their right to receive shares or securities in the transferee company, raising questions of compliance with Directive 2005/56/EC. The court held that the mergers were compliant with both the CCBMR 2007 and the Directive, noting the importance of purposive interpretation and the autonomous meaning of terms within EU legislation.
Judgment
The Hon. Mr Justice Hildyard :
The issue raised by these applications
These applications under Regulations 11 and 13 of the Companies (Cross-Border Mergers) Regulations 2007 (“the CCBMR 2007” or “the Regulations”) raise an important legal issue concerning the construction of the CCBMR 2007 and Directive 2005/56/EC on cross-border mergers of limited liability companies (the “Directive”). This issue is fundamental to the proposed mergers in this case and is (so I am told) of general market interest.
The issue is whether a proposed cross-border merger would be compliant with, and effective under, the CCBMR 2007 in circumstances where the shareholders in the transferor company have agreed not to receive shares or other securities in the transferee.
This issue arises because, at least on one reading, the CCBMR 2007 contemplate that in a cross-border merger (other than a merger by absorption of a wholly-owned subsidiary), shareholders in the transferor company will actually receive, as consideration for the merger, “shares or other securities representing the capital of the transferee company” : see Regulations 2(2)(f) and 2(4)(c). In the present case, and in light of the fact that all the companies concerned are (albeit indirectly) wholly-owned by the same ultimate holding company (Olympus Corporation, a Japanese body corporate), the draft terms of merger provide that the shareholders in the Applicant transferor companies will not receive any consideration from the transferee companies.
It is because such a point of principle is raised that the matter was (entirely correctly, in my view) listed before a Judge, rather than before a Registrar: and see per David Richards J in Re Oceanrose Investments Ltd [2008] EWHC 3475 as to the procedure under the Regulations (paragraphs 5 and 6 of that judgment), the usual practice of the Companies Court (paragraph 7) and the circumstances in which, exceptionally, it is appropriate that the matter is brought before a judge (paragraph 10).
Result
I have not found the issue straightforward. There are differences between the CCBMR 2007 and the Directive in the manner in which the same concepts and objectives are expressed; and some of the words and expressions used in the Directive would bear specialised but well-established meanings in English company law which, it seems to me, were not intended. The search for an autonomous meaning has necessitated two further rounds of expert evidence, and additional hearing