Do employees/other stakeholders have any specific approval, consultation or other rights?

Mergers & Acquisitions (2nd edition)

Hong Kong Small Flag Hong Kong

Please refer to the relevant Offshore Chapter.

Austria Small Flag Austria

If an intended M&A transaction entails significant changes to the organisational structure (including redundancies affecting a certain percentage of employees), the works council (provided that such works council exists) has information and consultation rights and also may issue its opinion on corporate restructuring measures and may enforce a redundancy program, but cannot hinder the transaction as such.

Article 3 of the Employment Contract Adaptation Act provides for a mandatory transfer of all existing employment contracts (including benefits) pertaining to the entire business or the operational business unit sold (e.g., asset deal) or transferred (e.g., by a merger) to another company. In a share deal the benefit plans of the legal entity whose shareholder changes will continue to apply.

Furthermore, under the Takeover Act, the bidder and the management of the target company are obliged to notify their respective works council without undue delay about the public offer. The works council does not have a blocking right.

United Kingdom Small Flag United Kingdom

One of the areas of concern on an M&A transaction, particularly in the context of a takeover is whether the target company has a defined benefit pension plan that is in deficit. It may be necessary to agree a course of action with the UK’s statutory Pensions Regulator, which could include funding, or at least guaranteeing some or all of the deficit.

Generally speaking, employees do not have approval or consultation rights in general in UK M&A transactions (but care should always be taken in the context of an acquisition of a target with operations in several jurisdictions). However, the treatment of employees in an acquisition of a business (as opposed to the acquisition of a company by way of a share acquisition) will give rise to certain considerations under the Transfer of Undertakings (Protection of Employment) Regulations including certain consultation and information provision obligations and the preservation of the terms and conditions of employees of the business being transferred with the employees in question transferring automatically to the buying company with the business being acquired. In addition, in the context of a public M&A transaction, if an employee representative has been appointed or there are pension trustees, the Code provides that they have the right to receive certain documentation relating to the takeover bid and also the right to have their written opinion on the proposed takeover bid included in the information distributed to target shareholders.

In addition, where the requisite thresholds are met, M&A transactions, whether private or public, may require merger control approval from the Competition and Markets Authority in the UK (the “CMA”) or the European Commission (the “Commission”) under the EU Merger Regulation.

Bulgaria Small Flag Bulgaria

The Bulgarian Labour Code sets out requirements for pre-notification of the employees in the event of merger, transfer of going concern or a specific part thereof, reorganization, distribution of the entity’s activity between two or more entities, among other protective mechanisms for the employees in case of change of the employer.

Recent legislative changes require transfer of shares in a limited liability company, transfer of going concern or a specific part thereof, to be carried out only if there are no due and unpaid payments to the employees (up to three years back), which must be proved with declarations by the transferor and the company’s management (and checks by the authorities can be performed). In the event of a mandatory tender offer in a public company, the management must submit a report on the consequences of the acceptance of the tender offer to the employees.

Transfer of shares in a limited liability company to a new shareholder must be approved by the general meeting of shareholders with a majority of ¾ of the capital by way of a written minutes of resolutions, certified by a public notary.

Generally, shareholders in a joint-stock company can freely transfer their shares without need of approval by the other shareholders. However, the articles of association of the target company, and/or any shareholders’ agreement among its shareholders, may contain conditions and restrictions for share transfers.

Colombia Small Flag Colombia

As mentioned in answer 8 above, shareholders and directors’ approvals will depend on the type of M&A transaction being undertaken.

In the performance of their duties, relevant employees and directors may be required to provide advice regarding the execution of an M&A agreement by the company, but except for the abovementioned approval rights, consulting the relevant employees/directors is voluntary.

Finally, potential acquirers should bear in mind that although in most cases there are visible controlling shareholders that would expedite the corporate approval processes, Colombian law and competent authorities are prone to protect minority shareholders’ rights in case of abusive actions undertaken by controlling shareholders.

In an asset deal, employers’ substitution must be considered. According to Colombian labor laws, an employer’s substitution takes place whenever (i) there is a change of employer, (ii) the enterprise continues and (iii) the employee remains under the same labor agreement. The effect of the employer’s substitution is the continuity of the existing labor agreements, since these are not extinguished, discontinued or modified.

France Small Flag France

In case of negotiation of the acquisition of a controlling block, the target’s works’ council (if any) must be informed and consulted ahead of signing the share purchase agreement.

In the event of a public offer, ahead of the target’s board providing its opinion on the offer, the target's workers' council (if any) must be convened by the target’s CEO immediately following the filing or the announcement of any offer, to be informed and consulted in respect of the offer. Such obligation to inform and consult the target's workers' council is not applicable if the target is the subject of an offer by a bidder, which, alone or in concert, hold more than 50% of the share capital or voting rights of the target. In such a case, the target's workers’ council shall only be informed about the offer. The works' council may decide on the friendly or hostile nature of the offer. In the context of the works council’s consultation, the council has the right (i) to invite the bidder to make a presentation to it within 1 week after the filing of the draft offer (or its announcement) and (ii) to appoint an accounting expert who shall within 3 weeks provide a report assessing the bidder's industrial and financial policy and strategic plans as well as the consequences of their implementation on the various interests at stake, employment, sites and the location of target's decision-making centers.

In the above-mentioned cases, the opinion issued by the target’s works council is not binding and cannot block the acquisition of the controlling block or the public offer, but may slow its timetable.

Finally, the law of July 31,2014, commonly named Hamon Law, has introduced an obligation to inform employees individually in the event of a share deal involving the sale of the majority of the share capital of a French société par actions in order to allow such employees to make an offer to acquire the relevant shares. Such obligation is applicable to companies (listed or non-listed) without a works council and with a works council but with fewer than 250 employees and falling in the category of SMEs (i.e. companies with a turnover lower than 50M€ or a total balance sheet lower than 43M€). In any case, it does not create any preemption or preferential right in favor of employees and the seller remains free to decline an offer made by any employee.

New Zealand Small Flag New Zealand

Employees and other stakeholders do not have specific approval or consultation rights as part of any sale of the shares of a target company, except to the extent that such rights have been contractually agreed.

Where a transaction is structured as a business and asset acquisition, the relevant counterparties will be prohibited from assigning contracts of employment and employees will have various consultation rights that are set out in statute.

Egypt Small Flag Egypt

Egyptian law does not grant employees the right to approve any acquisition. Additionally, an employer is not obligated to consult the employees during the acquisition process.

It must be noted however that the possibility of changes to the workforce during the acquisition process is restricted to a certain extent pursuant to applicable laws. Terms and conditions of existing employment agreements must be honored and any redundancies can only be made with the approval of the Ministry of Manpower.

In the context of a transfer of assets, while theoretically the employees are automatically transferred to the acquirer (as the new employer), practically the Labour Office and the Social Insurance Authority do not recognize such automatic transfer. In specific cases, the employees of the target must sign a resignation from their previous employment and accept their employment with the acquirer, which renders the legislative technique of automatic transfer de facto inoperative.

Cayman Islands Small Flag Cayman Islands

Both a merger and a squeeze-out provide for certain dissenter rights. In the merger context, dissenting shareholders are permitted (upon completion of the statutory process) to make an application to the court for the payment of fair value for their shares. Similar considerations apply for statutory squeeze-outs; however, where there is a tender offer which is not on an all cash-basis, dissenters have no right to compel a cash alternative. For schemes of arrangement, the key challenge is achieving the high approval majorities required of each class of shareholders.

Aside from a general consideration with respect to any relevant employment contracts, there are no employee or pension-specific provisions applicable to a merger; save that, where the surviving company is a Cayman Islands company, it assumes all contracts, obligations, claims, debts and liabilities of each of the other constituent companies, including any employment liabilities.

Additionally, the consent of each secured creditor of each constituent company to a merger is required. However, in certain circumstances, the court may grant relief from this requirement.

For a scheme of arrangement, there are no employee or pension-specific provisions applicable but, where the rights of creditors are to be affected, their consent will be required.

Employee, pension or creditor consideration will not be relevant to a tender offer or statutory squeeze-out.

Italy Small Flag Italy

If a transaction is structured as a purchase of a business or a branch or as a merger that will lead to a change of ownership of the company’s assets and liabilities, the employees are entitled to maintain their jobs and, therefore, their employment continues uninterruptedly with the buyer.

If the companies involved have more than 15 employees, the buyer and seller must follow a consultation procedure with the trade unions (under Law No. 428/1990). In brief, the seller and buyer must provide the trade unions advance notice of the planned transaction. The trade unions can request a joint examination to evaluate both the buyer’s management capacity in connection with the treatment of employees and its plans for future employment levels. The consultation is deemed completed after 10 days even if no agreement is reached. The outcome of the consultation is not binding.

With regard to publicly traded companies, as soon as a takeover bid is disclosed to the public, the target company must communicate the offer to the employees’ representatives or, if none exist, to the employees (under Art. 102 of the Consolidated Financial Act). The employees’ representatives can submit a document containing alleged transaction’s potentially harmful consequences on their employment (under Art. 103 of the Consolidated Financial Act).

Ireland Small Flag Ireland

There are no other specific approval or consultation rights. In the case of a public deal, the target’s board must give its opinion on the effects of the implementation of the offer and the bidder’s strategic plans on employment. The target’s board is also required to append to its response document any opinion received from its employees’ representatives. This is not, however, a prior consultation obligation.

Brazil Small Flag Brazil

Not usually. Some corporations (mostly those on which the government holds a relevant equity stake) allocate one of the board seats to employees, but this is as far as the employees influence in M&A deals.

Cyprus Small Flag Cyprus

The general principle is that there must be equal treatment to all shareholders of the target company. Hence, the bidder must treat employees or other stakeholders who hold shares or have the right to acquire shares equally in terms of the benefits or terms offered.

In any event, the Safeguarding and Protection of Employees Rights in the Event of the Transfer of Undertakings, Business or Parts Thereof Law (Law 104(I)/2000) grants rights to the employees in the event of a sale or transfer of a business or part of a business. In particular, Law 104(I)/2000 grants the following right to employees in the event of a sale or transfer:

a) The transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee;

b) Provided that the transferor and transferee may agree that after the date of transfer, they shall continue to be jointly and severally liable in respect to obligations created before the transfer and which arise from a contract of employment or employment relationship in force at the time of the transfer; and

c) Following the transfer, the transferee shall continue to observe the agreed terms and conditions of any collective agreement on the same terms applicable to the transferor under that agreement, or practice, until the date of the termination, or expiry of the collective agreement, or until the entry into force, or application of another collective agreement. The existing agreed terms and conditions of employment shall be preserved for a minimum period of one year.

Furthermore, sections 198-200 of the Companies Law regulate the procedure that needs to be followed in private M&A transactions. The Companies Law provides for the approval of the proposed scheme at a general meeting of the members by at least 50% +1 of those present and entitled to vote as well as an approval from a meeting of the creditors (again 50%+1 of those present and entitled to vote) as well as obtaining the sanction of the competent Court.

In relation to a public takeover bid CySec is designated as the competent authority which regulates and sanctions/approves the procedure.

Norway Small Flag Norway

As a point of basis, share acquisitions will not trigger any statutory approval or consultation rights for neither employees nor other stakeholders. A share acquisition in itself will normally not affect an employment contract and therefore not trigger any duties on the new shareholder(s). However, if the target is listed on a Norwegian regulated market, the STA imposes additional obligations to inform the employee in connection with a public bid for shares in the company. In addition, if the target company is bound by a collective bargaining agreement with a trade union, it may be obliged to notify the employees if a shareholder's (buyer's) ownership percentage exceeds certain thresholds. The collective bargaining agreement may also impose the target to contribute to the buyer informing the target's employee's on its plans. A target company may also have specific contractual obligations towards creditors or other stakeholders that requires consultation or approval.

With respect to statutory mergers, the merger must be notified to the NRBE after which a six weeks creditor notice period follows. During such period, creditors of the merging companies may claim their rights, and, as a point of basis, the merger will not be effectuated before the claim is settled. In addition, the merger plan and the board statement on the merger's anticipated effect on employees must be made available to the employees. For a statutory merger, the board of the merging companies must prepare a detailed statement covering the merger and its anticipated effects on employees. The employee representatives (both in listed and non-listed) merging companies will have a statutory right to receive all information and related reports and statements, and to discuss the merger with the board.

Special notification rules apply for alternative investment funds (AIFs), which (individually or jointly) acquires control of a target that fulfils certain criteria. Under these rules, the investment manager must notify and disclose the fund’s intentions with regard to the target’s future business and the likely repercussions on employees etc.

In business combinations structured as a transfer of an undertaking, both future and current employer will have certain duties to notify and consult with employees and their representatives. However, there are no requirement to obtain consent from the employees to carry out an asset sale, but pursuant to the Norwegian Working Environment Act (2005), the employee's elected representative and the employees shall, as early as possible, be presented with information concerning the transfer.

Moreover, in transfers of undertakings, the rights and obligations of the former employer ensuing the employment contract or relationship in force at the date of the transfer, shall be transferred to the new employer. The transfer in itself do not give just cause for a termination of the employment contract for the new employer. Meanwhile, an employee have the right to object a transfer of the employment to the new employer, often referred to as the right of reservation.

Myanmar Small Flag Myanmar


Greece Small Flag Greece

The Greek company law has not endorsed the two tier system. However the employments laws provide, that employees of private companies that employ more than 50 or 20 persons, as the case may be, have the right to be informed prior to the transfer of the company about the date of the transfer, its background, eventual financial, legal and social consequences, as well as the planned actions that relate to employees; equally, they are entitled to information by the acquirer in a timely fashion.

The opinion of the BoD in relation to the bid must be distributed to the employees’ representatives, who subsequently may submit and annex their reply. Similarly, a right to be informed exists in relation to the outcome of the takeover bid. If the administration of the transferred company intends to take action relating to the status of the employees, the latter have the right to participate in consultations with the managers of the company, in order to reach an agreement.

The creditors of a merging SA are entitled to financial guarantees if the financial status of the merging companies renders such guarantees necessary. Furthermore, creditors owning convertible bonds in at least one of the merging companies have a specific approval right over the merger. Equally, creditors of merging PCs can object to the merger or request to be granted sufficient securities.

Germany Small Flag Germany

If the company regularly employs more than 500 people domestically, one third of the supervisory board members must be representatives of the employees; if the company has more than 2,000 employees, one half of the members of the supervisory board must be employee representatives. These German co-determination laws are mandatory for the German Stock Corporation and the SE. However, even though the formation of a supervisory board is generally not mandatory for a German limited liability company, the co-determination legislation will also apply to GmbHs with the relevant number of employees and will require the establishment of a supervisory board. Given that, employees enjoy the same rights via representation as any other stakeholder group represented in the supervisory board.

a) Public M&A Transactions
In a takeover situation, the works council must be informed by the management board. The information must include detail on the potential purchaser and its intentions with the target regarding the future business activity of the target as well as the expected impact on the employees. The works council of the target may issue a reasoned statement to the management board on the offer. The management board is obliged to publish the works council’s statement alongside its statement on the takeover offer. Other than that, the management board does not have to consult the works council with respect to the offer.

b) Private M&A Transactions
For private M&A transactions, share and asset deals need to be differentiated.
If an acquisition is structured as a share deal, the identity of the employer will remain unchanged, and consequently also the contractual obligations and rights between employer and employees. A share transaction normally only requires the management to inform the economic committee (Wirtschaftsausschuss), or the works council if no economic committee exists, within a reasonable time period during the transaction process. Failure to properly inform the economic committee (or the works council) may result in an administrative fine of up to EUR 10,000. It does not affect the validity of the acquisition agreement, however.

For an asset deal, it is important how many assets are transferred under the agreement. If an essential part of the assets which allows the purchaser to continue the business activity is transferred, this may be recognized as a “business transfer” pursuant to section 613a of the German Civil Code. A “business transfer” triggers certain legal implications, including the automatic transfer of all employment contracts relating to the transferred business to the purchaser. The employees may object to such transfer. Similarly to a share deal, the business transfer as such is not subject to co-determination rights by the works council. However, if only a part of the original company’s assets are transferred, legally this usually constitutes an “operational change” by way of a business split up, which requires the works council to not only be informed, but also consulted. If the works council raises concerns, a reconciliation of interest must be found or a social plan established.

Belgium Small Flag Belgium

Belgian employment law requires that employees/employees’ representative are informed and consulted in relation to envisaged restructurings of a company, including in case of a merger.

In addition to this general requirement, Belgian regulation on public offers imposes specific obligations towards the employees/employees’ representatives. The board of the target and bidder are required to inform their respective employees’ representatives or their employees of the offer and provide them with a copy of the prospectus once it is made public. The board of directors of the target company must further inform the employees’ representatives or the employees about its opinion on the offer.

When the target company has a works council, the latter may hear the representatives of the bidder's management body. The representatives must provide the works council with certain information, including information on the bidder's industrial and financial policy and its strategic plans for the target company. The works council can submit its comments, if any, to the bidder’s management.

In specific sectors, an M&A transaction might require the prior approval of a regulatory authority. In particular, this will be the case for companies active in the financial services sector (such as insurance companies and financial institutions).

Some M&A transaction might also require prior clearance from the competition authorities. Whether any prior clearance is required, depends on the size of the target company and the bidder.

Vietnam Small Flag Vietnam

10.1 As a general proposition, employees and other stakeholders do not have any particular approval, consultation, or other rights in connection with M&A transactions in Vietnam, except in certain limited cases.

10.2 In the context of merger transactions, the entity which continues to exist post-merger (the Merged Company) is obliged at law to retain the employees of the entity which merges into the Merged Company and ceases to exist post-merger. In some cases, the Merged Company will be obliged to consult with relevant internal or external trade unions in relation to employment usage plans and/or related matters.

10.3 In the context of asset acquisition transactions, Vietnam law does not recognise any concept of the “transfer” of employees or similar. “Transfers” of employees can only be achieved by way of the voluntary termination of existing contracts of employment with the transferor entity and the entry into fresh contracts of employment with the transferee entity. Employees cannot be compelled to participate in such termination and re-hiring processes. The transferor entity is obliged to prepare an employment usage plan and obtain the opinion of relevant internal or external trade unions in relation to it.

Switzerland Small Flag Switzerland

Swiss labor law and regulation are very liberal compared to other European jurisdictions. In general, there is no requirement to inform, consult with or seek consent from the labor force or labor unions in connection with M&A transactions. Certain exceptions apply in relation to asset deals, or if a mass dismissal or similar measures are contemplated. In case of a statutory merger, the employees' representatives of the companies must be informed or, in case measures, such as (constructive) dismissals, were contemplated, consulted prior to the merger being approved by the general meeting of shareholders. This requirement can typically be satisfied between signing and closing of a transaction.

Russia Small Flag Russia

Participants (shareholders) of a non-public company have pre-emptive rights to buy interest (shares) offered for sale to a third party. This right is statutory for limited liability companies and optional for non-public joint-stock companies. A company’s charter may contain further details and requirements for the procedure, or even a pre-emptive right of the company itself to buy out the interest (shares).

Public joint-stock companies are not allowed to provide first refusal rights to any parties, except for the right of shareholders and holders of the company’s securities’ to buy additional shares in certain cases. However, a party which acquired more than 30 or 50 or 75% of shares in a public company shall make to other shareholders a mandatory offer to sell such other shareholders’ shares at the price being the average stock exchange trading price for the six months preceding the offer, or if shares have been traded for less than six months – at the price determined by a valuer.

In the event of a merger or another corporate reorganisation, minority participants of a limited liability company can veto relevant resolutions. In a situation with a joint stock company, shareholders who voted against a resolution on reorganisation or did not participate in the voting are entitled to require purchase of their stakes by the company.

Usually, employees have no say in M&A matters.

Romania Small Flag Romania

Employees are informed or consulted about important decisions concerning major changes in the labor conditions. Employees have a say (e.g. veto right) only if such right is set out in the articles of association or collective labour agreement (which is rare).

Qatar Small Flag Qatar


United States Small Flag United States

There is no requirement that the board of a public company obtain the approval of, or otherwise consult with, employees or any other stakeholders besides shareholders. However, 28 states have adopted constituency statutes that expressly permit, but do not require, a board of directors to consider the interests of stakeholders such as employees, customers, suppliers and communities served by the corporation in determining whether or not to approve a merger.

Sweden Small Flag Sweden

Under Swedish law the workers’ unions have certain rights to be informed/consulted in matters that may affect their rights or employment conditions. This does not include a blocking power for the unions/employees when it comes to M&A transactions. For a standard share transfer transaction, no union consultation is required (unless it is evident that there e.g. will be redundancies in either of the involved companies as a result of the transaction) while an asset deal involving transfer of employees generally triggers the obligation to consult with the unions prior to any decision being taken. The consultation process is normally quite straightforward and not that time consuming.

In the context of a public takeover, a Swedish offeror shall inform its employees about the takeover offer and the offer document as soon as they have been made public. The Board of Directors of the target company shall inform the employees of the target company about the takeover offer, the offer document and the Board of Director’s recommendation to the shareholders as soon as they have been made public. The same information shall also be given to employee organisations which represent employees of a Swedish offeror/target company.

Philippines Small Flag Philippines

Under Philippine laws, employees or other stakeholders generally have no any specific approval, consultation or other rights.

Guernsey Small Flag Guernsey

There is no requirement to consult with or obtain the specific approval of employees but the Takeover Code (if applicable) does require that certain documents (including the offer document and announcement) are provided to an appointed employee representative (or to the employees if there is no appointed representative).

For an amalgamation under Part VI of the Guernsey Companies Law, creditors of the company must be given written notice of the proposed amalgamation and have a right of inspection of the amalgamation proposal and a right to a free copy of the amalgamation proposal upon request.

For a scheme of arrangement under Part VIII of the Guernsey Companies Law, the Court may make provision for any persons who, within such time and in such manner as the Court directs, dissent from the arrangement. It should also be noted that as part of a scheme of arrangement the target is obliged to provide notice of the proposal to the company’s creditors. The rights of these creditors and any submissions that they may make will be considered by the Court when deciding whether to sanction the scheme.

Japan Small Flag Japan

In stock-transfer transactions, employees, creditors, business partners or other stakeholders do not have any statutory approval, consultation or other rights under the law. However, these stakeholders may have specific rights granted to them under relevant agreements.

On the other hand, some stakeholders may have specific approval, consultation or other rights in an asset-transfer transaction. Asset deals are often structured to include a contractual asset or business transfer component, a statutory demerger (kaisha bunkatsu) component or both. In the case of a contractual asset or business transfer, the designated contracts and other rights and obligations cannot be transferred without procuring the consent of the relevant counterparties. But, in the case of a statutory demerger, contracts and other rights and obligations specified in the agreement or plan concerning such demerger can be transferred without the necessity of procuring the consent of the relevant counterparties (although they may have specific rights under the contracts). The above notwithstanding, as part of the demerger process, the parties thereto are required by law to undertake certain statutory procedures to protect the interests of employees and creditors and to take certain measures when an employee or creditor raises an objection to the demerger.

Isle of Man Small Flag Isle of Man

There are no specific obligations under Isle of Man law to consult with, or obtain approval from, employees or other stakeholders.

If applicable, the Takeover Code contains provisions relating to engagement with employee representatives and the provision of information.

If the target is a regulated business, regulatory approval may be required.

Mauritius Small Flag Mauritius

There is no requirement to consult with or obtain the specific approval of employees and creditors. However they may be informed of the proposed M&A.

Bermuda Small Flag Bermuda

Transactions such as these may of course lead to a rationalisation of staff. Section 30 of Bermuda’s Employment Act 2000 provides that where any redundancy, whether the result of M&A or not, is considered the employer must, as soon as practicable –

a) inform the employee’s trade union or other representative (if any) of the following information:

  1. the existence of the relevant condition of redundancy;
  2. the reasons for the termination contemplated;
  3. the number and categories of employees likely to be affected; and
  4. the period over which such termination is likely to be carried out; and

b) consult the employee’s trade union or other representative (if any) on:

  1. the possible measures that could be taken to avert or minimise the adverse effects of such redundancy on employment; and
  2. the possible measures that could be taken to mitigate the adverse effects of any termination on the employees concerned.

Employees do not have any general consultation rights under Bermuda law unless they are “unionised”, that is to say members of a union. The procedure of consultation and/or further specific rights may vary dependent upon the particular terms of the collective bargaining agreement between the company and the union.

British Virgin Islands Small Flag British Virgin Islands

A dissatisfied member may dissent from a merger (unless the member will continue to hold the same or similar shares after the merger) or a consolidation. A dissenting member is entitled to payment in cash for the fair value of his shares. The value of the shares is determined without reference to the effect or impact of the proposed merger (whether positive or negative).

To initiate the dissent process, the member must object in writing to the merger or consolidation before the vote on the plan. If the merger or consolidation is not approved, then of course no further action need be taken with respect to or by the dissenter. If the merger or consolidation is approved by the other members, however, the company has 20 days give notice of this fact to each objector, and to each member who did not receive notice of the meeting. Such persons have 20 days to give to the company their written election to dissent from the merger or consolidation, provided that in the case of a merger, the 20 days starts when the Plan of Merger is delivered to the member.

Upon giving notice of his election to dissent, a member ceases to have any rights of a shareholder except the right to be paid the fair value of his shares.

Within seven days of the later of the delivery of the notice of election to dissent and the effective date of the merger or consolidation, the company must make a written offer to each dissenting shareholder to purchase his shares at a specified price that the company determines to be their fair value. The company and the member then have 30 days to agree upon the price. If the company and the member fail to agree on the price within the 30 days, then the company and they must each designate an appraiser and these two appraisers designate a third. These three appraisers shall fix the fair value of the shares as of the close of business on the day before the shareholders approved the transaction without taking into account any change in value as a result of the transaction.

There is no requirement under BVI law for any consultation with employees in relation to an offer. In the limited circumstances where the company has BVI employees, the BVI Labour Code, 2010 (Labour Code) deals with continuing employment of employees in a surviving company and provides that those offered continuing employment will carry forward their service and accrued rights.

Jersey Small Flag Jersey

There is no obligation to consult with or obtain the approval of employees. If the Takeover Code applies, there is an obligation to provide certain documents to either an employee representative or otherwise to the employees.

Turkey Small Flag Turkey

In Turkish companies, it is not typical for employees or other stakeholders to have any approval or consultation rights over share acquisitions. However, mergers and demergers are subject to shareholder approval. Also, for limited liability partnerships, share transfers would require shareholder approval.

Nigeria Small Flag Nigeria

No, employees generally do not have approval, consultation or other rights in an M&A transaction. However, in a merger, the employees of the merging companies as well as the trade unions operating within the relevant industry are required, in accordance with the provisions of the ISA, to be given notice of the proposed merger. The Scheme of Merger also sets out the plan for the employees of both companies.

In other cases, subject to the terms and conditions of any collective bargaining agreement that the Target had executed with the trade unions, consultation with the employees may be required.

In relation to other stakeholders, approval, consultation or other rights is dependent on the terms of the contracts/relationship with the target.

Hungary Small Flag Hungary

Shareholders’ approval and decision rights. Shareholders other than the selling shareholders may be involved in M&A transactions by way of exercising certain decision and approval rights in several different ways.

The shareholders of a private company may agree in the company’s articles of association, that the shares of the company can be transferred to a third person only with the company’s consent. Pursuant to the Civil Code, the shareholders’ meeting of the company has competence in resolving on the consent.

Also, if a shareholder wishes to transfer its share in a limited liability company to two or more separate acquirers or if it wishes to transfer only a part of its share such share needs to be divided. Such division must be approved by the shareholders’ meeting. At the shareholders’ meeting, the transferring or dividing shareholder cannot vote regarding the transfer or the division. Hence, the transfer and the division will actually be allowed or rejected by the other (non-transferring and non-dividing) shareholders.

Shareholders’ right to make a counter-offer in a public takeover bid. In a public takeover bid under the Capital Market Act, shareholders have the right to make a counter-offer and may, thus, attempt to prevent acquisition by the person who intends to acquire shares via the public takeover bid.

Involvement of employees. In Hungary, the involvement of employees is M&A transactions is rather formal and confined to information and consultation rights and employees do usually not have consent or approval rights.

Employees involvement in the supervisory board and the board of directors. Under the Civil Code, employees of larger companies are involved in the supervision and, in certain cases, the management of the company via employee representatives. At a company that has more than 200 full-time employees (average per year), one third of the members of the supervisory board must be appointed from the employee representatives. The supervisory board supervises the company’s management. It also opines on the draft financial report of the company before it is approved by the supreme body, and on the intended merger or transformation of the company, as the case may be., The company’s employees are involved in these competences via the members of the supervisory board who are employee representatives.

If a public company is managed by a uniform board or directors, which performs the tasks of both the management board and the supervisory board, and employees have the right to take part in the supervisory board based on the number of employees employed at the company , the board of directors and the workers’ council must agree on the participation of the employees in the board of directors. Hence, via the members of the board of directors who are employee representatives , employees may be involved in the management and supervisory competences at the company.

Ex ante information of employees in case of transformations, mergers and demergers. The Transformation Act prescribes an obligation for the company’s management to inform employees on the intended transformation, merger or demerger of the company after the resolution on the transformation, merger or demerger but still before the registration thereof by the competent court of registration. This employee notification is a precondition for the registration of the transformation, merger or demerger. However, it does not convey any consent or approval rights to employees.

Employees’ opinion on public take-over bid. In case of the acquisition of a public company via a compulsory public takeover bid under the Capital Market Act, the management board must issue and publish an opinion of the compulsory public takeover bid, to which the opinion of the employees shall also be attached. Such opinions most commonly address the operation program and the business plan submitted by the bidder. The opinions must be published to the other shareholders of the target company as well.

Updated: November 13, 2018