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Commercial Law
Course 12
Dec. 10, 2015
Zissu C. Carabas

Merger Definition

A technical-legal process by which a restructuring of a

trading company is achieved

To put it more simply... a combination of two things,

especially companies, into one.;
the merging of one estate or title
in another.


( continued)

According to section 238, Law no. 31/1990, it is a

procedure by which...

One or more trading companies is/are

dissolved without having to liquidate...

...thereby transferring the entire patrimony

to another firm, in exchange for:

receiving shares (a share

no higher than 10% in the
benefitting enterprise)

monetary compensation


To strengthen positions in one or more markets

Increase efficiency by improving the companys


Acquire skills and technology

Encourage competitive behavior

Countless others


According to section 239, Law no. 31/1990, a

merger must be agreed upon by both parties

Additionally, each firm must fulfill the

requirements stated in section 204, Law

Requirements ( continued)
Section 204, Law 31/1990

A merger can be achieved exclusively through a

decision by the extraordinary general meeting

Section 204 also states that anyone outside the

EGM (such as the administration) is not allowed to
partake and make any decisions during this


Merging project preparation

Announcement and publication


Informing the associates

EGMs final decision in the merging process

Steps (1/5)

Merging project preparation

According to section 241, Law 31/1990, the project

must contain the following elements:

Steps (1/5)


o Denomination, structure,
and headquarters of each
firm involved in the

o Interest/social parts and

shares exchange rate - and
possibly monetary
compensation, if applicable

o Terms and conditions

o Merger premium value

o Asset and liability

evaluation that are due to
be transferred

o Granted rights

o Handover procedure
(interest, social parts,

o Details regarding financial

o Any other valuable piece of

Steps (2/5)

Announcement and publication

The signed documentation must be handed over to the

Register of Trade

Declaration containing proof of operation cessation

According to section 242, Law 31/1990:

- the project must be published in the Official Monitor
- must take place 30 days prior to the EGMs

Steps (3/5)


According to section 243, Law 31/1990, anyone

participating in the merging process has the right to
object if his/her interests have been undermined

The objection application deadline is 30 days after the

publication in the Official Monitor.

Its aim is to stop the merging process until the court

order becomes irreversible

Steps (3/5)


In case the merging process moves forward and

eventually takes place while the lenders interests have
been infringed, all other parties will become responsible

As a result, the responsible partaker(s) will be

indefinitely indebted towards the victim

Steps (4/5)

Informing the associates

In order to obtain voting eligibility, all associates

must be informed regarding the conditions and
consequences involving the operation

Steps (5/5)

EGMs decision in the merging project

According to section 246, Law 31/1990, this shall be

the final step in the process

In case a consolidation merger takes place, the

constitutive act has to be authorized by each EGM
group having previously been part of the companies
that have now ceased operations

Mergers can fail, too


Lack of human integration

Mismanagement of cultural issues

Lack of communication


Dissolution of the company/companies without

having to liquidate

In exchange for the newly-acquired inheritance,

the beneficiaries will have to assign shares and
social parts to the associates who have ended

The defunct firms rights and obligations will be

applied to the new entity

Just a few examples

Gone well

Exxon and Mobil

Sirius and XM Radio

Air France and KLM

Gone wrong

Daimler Benz and Chrysler

AOL and Time Warner

eBay and Skype

Advantages & Disadvantages

Possibility of
expansion (higher
revenues and/or
Extended product
Could turn out to be
great investment

Nearly impossible to
hold your

A risky gamble

High pressure and


Types of Mergers



- End of Presentation Thank You For Your Attention!



CRPENARU, Stanciu D., Tratat de Drept Comercial

Romn, Bucureti, Universul Juridic, 2009