Increasing competition at the global level has led companies to seek new economic opportunities in order to increase their profits and produce new solutions. Company mergers are also one of the methods used by companies in this context.
Companies can resort to this method for reasons such as saving themselves from difficult situations, becoming stronger of economically strong companies, benefiting from tax incentives, working more efficiently, and getting rid of legal difficulties.
We can define company mergers as the merger of two or more different companies under a new legal entity by terminating their legal personalities or the merger of one or more companies with another company under the legal personality of this company.
In company mergers, companies establish a new company or come together under the umbrella of an already existing company. The legal existence, that is, the legal personality of the companies participating in the merger ends. The shareholders in this company become the shareholders of the newly established company or the transferee company.
At this point, it is possible to say that cross-border company mergers are important in terms of global trade. One of the most important sources in this sense is the Directive on Some Aspects of Company Law dated 14.06.2017 and numbered 2017/1132 / EU prepared by the European Union. Directives prepared on the subject are an important guide in terms of facilitating cross-border company mergers in the EU.
Some difficulties arise in cross-border mergers, especially since the merging companies are included in different legal systems. At this point, the law to be applied to cross-border company mergers is of great importance.
It is possible for a Turkish company to be involved in a merger as a transferee or transferred, but it should be noted that there is no specific regulation in Turkish law regarding cross-border mergers.
Essentially, there are two types of mergers. In the Article 119/2 of the European Union Directive 2017/1132 / Eu, merger through acquisition is mentioned. Regarding the merger of publicly held capital companies by acquisition, there is a regulation in the 89th article of the Directive 2017/1132 / EU. Detailed regulations regarding merger through acquisition have been made in these articles.
Company Merger through acquisition, also called join, is an easier practice. In this type of merger, a company takes over one or more companies. For this reason, it is known as a more commonly used acquisition type.
Another way of company merger is merger through new incorporation. In this merger, two or more companies terminate their legal entities by dissolution without liquidation. Then, they transfer their assets to the trading company they will establish through complete succession. Shares of newly established companies are given to the partners of the terminated companies in proportion to their shares. Whatever the type of the company to be established, the legal rules regarding the establishment of that type are applied in the establishment of the company. This type of merger involves a longer and more laborious process than merger through acquisition.
In the 90 and 119/2-b provisions of the European Union Directive 2017/1132 / EU, the regulations on merger through new incorporation are included.
Companies carry out cross-border mergers for various reasons. One of these reasons is economic purposes. The reason that drives states to cross-border unification is more political. Especially in developing countries, since there is not enough capital in the country, it is important for foreign capital to enter the country in order to develop production and workforce. Foreign investment is also required for foreign capital to enter the country. The presence of foreign investment increases employment within the country. Foreign investment has an important place in Turkey.
Companies have to develop in order to continue and compete in the market they are in. These developments are mostly realized by following technological developments. It is very important to follow technological developments, to have industrial rights, to benefit from the opportunities provided by technology. By merging, companies can have these opportunities more easily and cheaply.
By merging, companies can have the opportunity to enter new markets faster and at lower costs. In addition, in order to find cheap and young workforce, they can seek to merge with companies that have a market where they can benefit from wide employment opportunities. In this way, the company merged with can benefit from the market.
Companies may choose to merge to increase revenue and increase their strength in the market. In this way, companies get more profits by merging them than they can earn independently. With this increase, their competitive power also increases.
As a result of company mergers, improvement is observed in the financial conditions of companies. In this way, the risk of bankruptcy was reduced. Fast growing companies can more easily overcome the financial problems they may encounter in this way.
There are also tax advantages arising from the systems accepted by countries in mergers.
The rapid advancement of technology, the increasing dependence of national economies on each other, the widespread use of international trade, and the excessive involvement of companies with cross-border mergers in the world economy reveal globalization.
While states were accepted as the most important actors affecting the economy in the 20th century, today companies have entered this role. Especially with the increase of globalization in terms of economy, companies started to act independently from the country they are located in. Due to the economic consequences brought about by globalization, companies choose to merge.
There is a court decision on this issue. Centros appeared between Centros co(private limited company) and Erhvervs-org Selskabsstyrelsen in England on May 18, 1992 for the following reason; It was caused by the refusal of Centros to register its branch in Denmark.
Centros company has not carried out any commercial activities since its establishment. The company has not paid the capital amount stipulated in English law. The company is divided into two shares, which are owned by two Danish citizens living in Denmark.
According to Danish law, this company is considered as a foreign equity company.
The delegation claimed that it did not constitute a violation of Articles 52 and 58 of the Treaty of the European Community. The delegation claimed that the company located in the UK had established a parent company, pretending to open a branch in Denmark. Establishing a branch in Denmark was seen as a way of avoiding the application of national laws and the payment of minimum capital. In addition, it has been claimed that this registration aims to prevent fraudulent bankruptcy.
The court stated that the lack of active operation of the company in the country registered in the register would not prevent it from enjoying the freedom of residence in another member state. The exercise of the rights granted by the freedom of residence should not be an abuse of the right.
The Court of Justice of the European Community stated that the Centros company may open a branch in Denmark and that the desire to avoid the conditions sought in Denmark would not constitute an obstacle to the freedom of residence.
Companies located in a non-EU member country will still be able to enjoy the freedom of residence if they establish a company in a member country.