Share merger

As an entrepreneur, you will face many difficult decisions; decisions that are highly likely to influence the future of your business. For example, a merger, where two companies choose to join forces, or one company takes over the other. In such cases, you have the choice between a share merger, a business merger or a legal merger. Before you begin this process, it is important to gather information so that you can make an educated decision.

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Different types of company mergers

In the event of a company merger, there are several options:

The business merger. In this process, the assets and liabilities of one company are acquired by another, with the assets and liabilities being transferred separately. Both companies continue to exist in this situation.
The legal merger. Unlike a business merger and a share merger, this form of merger is governed by law. In this process, the assets of the legal entity (or entities) are transferred to the acquiring party. In this context, one speaks of an acquiring legal entity and a dissolving legal entity.
The share merger. In this process, the shares, or a portion thereof, are transferred to another company, with the party holding the majority of the shares exercising control. Although both companies continue to exist, we often refer to this as a ‘takeover’. This type of company merger is not regulated by law either.

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Acquisition With Shares Step By Step Guide

Step-by-step guide to a share merger

With a share merger, as with any company merger, you want to ensure that everything is handled correctly. To this end, we recommend following a set step-by-step plan for an acquisition with shares:

Both parties are involved in drafting the merger proposal. Once the merger proposal has been drafted, it is important that all directors sign it.
The proposed share merger is being assessed for feasibility and viability. In this regard, it is important, for example, that the company to be acquired is profitable or has a positive equity position.
The share merger will be filed with the Kamer van Koophandel, after which the filing must be published so that anyone with an stake in the matter may lodge an objection.
The resolution to merge the companies may be passed, and the deed of merger may be executed. This resolution is usually passed by the General Meeting of Shareholders. The resolution must be passed no earlier than one month and no later than six months after the above publication.
The act of merger has yet to be executed, after which the merger deed must be registered in the Commercial Register of the Kamer van Koophandel.

As you can see, there are many steps to be taken, each of which is subject to specific regulations and laws. This acquisition with shares road map can assist you in this process. However, undertaking an share swap merger also requires a high level of legal and tax expertise. Bright Orange is here to simplify the company share merger process for you.

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Terms and conditions of the share swap merger

A share swap merger must at all times meet certain conditions. As mentioned earlier, a company that is making a loss may not be acquired. One (acquiring) company purchases shares in the other company. The receiving company receives shares in exchange for the value of the shares. It is important that the value of the shares must be at least equal to the amount it provides to the other company.

In the case of a public limited company (NV), the auditor verifies this and draws up a statement to this effect. We refer to this as the contribution audit. If the companies have a works council, it must be consulted regarding the proposed merger.

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Terms And Conditions Of The Share Swap Merger

Get your acquisition with shares right first time

You want your merger to go smoothly, without too many worries or problems afterwards. Bright Orange is here to support you throughout this process. As a specialist M&A firm, we have been guiding entrepreneurs who need assistance with merging or acquiring their businesses for many years. Throughout this process, you will work with dedicated partners and consultants to ensure a smooth process. Bright Orange ensures your share merger runs smoothly. Get in touch to find out what we can do for you.