EP Legal Affairs Committee vote on cross-border mergers

31 March 2005

The European Parliament's Legal Affairs Committee voted to exempt companies with fewer than 500 employees from new EU rules on cross-border mergers between firms with share capital on March 31. All of rapporteur Lehne's amendments to the Commission proposal were adopted by the Committee in its first reading. The Committee's opinion closely follows the agreement reached by Council in November 2004.

The Committee agreed with the Council that European standard rules on worker involvement should also apply if more than one-third of the new company's employees were previously covered by a worker participation system. The Commission originally suggested a 25% threshold. The Parliament voted to give member states two years to comply with the Directive after it enters into force - an increase from the 18 months suggested by the Commission.

Final vote in plenary will take place on 1 May.

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