On 6 June 2023, the act of 25 May 2023 regarding the partial implementation of the Mobility Directive was published in the Belgian Official Gazette. The purpose of this act is to make changes to the rules on cross-border conversions, mergers and demergers, but also brings some important changes in the area of national restructurings.
1. Entry into force
The Act entered into force on 16 June 2023. This means that (cross-border) mergers, demergers and conversions whose proposal was filed with the registry of the competent corporate court as from 16 June 2023 should proceed according to the new rules. Ongoing proceedings (whose proposal dates before 16 June 2023) are not yet subject to the new act.
2. Three new restructuring forms
The Act creates three new forms for (national) mergers, demergers and conversions.
Article 12:8, 1° of the Belgian Code on Companies and Associations (the “BCCA”) provides for the possibility of the disproportionate partial demerger. This means that in a partial demerger, shares in the demerged company can also be issued to the partners or shareholders of the demerged company. This method can be applied for both national and cross-border transactions.
In addition, the simplified sister merger is introduced in Article 12:7, 2° BCCA. This involves a simplified merger procedure between two companies of which all shares are held by a common parent company. It can be applied to both national and cross-border transactions.
Finally, an additional third paragraph has been included in Article 12:8 BCCA, which is the cross-border demerger by separation. This entails the cross-border legal transaction whereby part of the assets of a company are transferred without dissolution to one or more acquiring or new companies incorporated by it against the transfer of shares in the acquiring or new companies to the demerged company. As a result of this transaction, the newly issued shares do not accrue to the shareholders, which is the case in a partial demerger, but accrue to the transferring company itself. This method can only be used for cross-border transactions.
3. Exit right of a minority shareholder
The most far-reaching change as a consequence of the implementation of the Mobility Directive, is the minority shareholder’s exit right. When a minority shareholder does not consent with a cross-border merger, demerger or conversion, such minority shareholder can exercise its exit right. This means that in exchange for its exit, the minority shareholder is entitled to a repayment for its securities equal to the value as applicable in the proposal relating to the transaction.
4. Majority requirement in the general meeting
Finally, there is a reduction in the required majority vote within the general meeting deciding on a national conversion from 4/5th majority to 3/4th majority.
