The EU Cross-Border Mergers Directive enables a private or public company in one EU member state to merge with a company in another member state. Brexit is therefore unlikely to have any significant impact on takeovers. The EU Takeover Directive harmonises public company takeovers in the EU and is modelled on the UK Takeover Code, which regulates takeovers of public limited companies in the UK. The vast majority of M&A transactions in Europe take place between private companies, either by means of an acquisition of shares or of assets, and Brexit will not affect the laws governing such transactions. The UK Companies Act 2006, which embodies UK law as it relates to both public and private companies, has been significantly influenced by EU directives, however, it is highly unlikely that Brexit will result in any changes to UK company law, so the basic mechanics of acquisitions and disposals of UK companies will remain the same. This Client Alert will focus on the likely impact of Brexit on the laws of the UK influencing key business areas for U.S. Furthermore, the UK’s relationships with non-EU states will have to be independently reestablished, as it will no longer be entitled to rely on the bilateral treaties with those states it enjoyed whilst an EU member state. No member state has initiated this procedure before, and so it is impossible to predict what this future relationship will be. The UK will be immediately excluded from the European Council and the Council of Ministers, and a negotiation period of two years will commence during which the terms of its withdrawal and of its future relationship with the EU will be determined. The UK government will now initiate the procedure under Article 50 of the Lisbon Treaty leading to the UK’s withdrawal from the EU. On June 23, 2016, the UK voted in a referendum to leave the EU.
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