Implementation of the Cross-Border Merger Directive in Italy

June 19, 2008

Effective from July 2, 2008, Italy will implement EC Directive No. 2005/56/EC on cross-border mergers of limited liability companies (the “Directive”). The Directive laid down, after more than 30 years of debates, a common framework aimed at facilitating cross-border mergers between various types of limited liability companies and stock corporations governed by the laws of different EU Member States. The Directive is based on the principle that a Member State must allow the cross-border merger of a domestic company with a company from another Member State, if the national law of that Member State permits domestic mergers between the same types of companies.

In keeping with the 2005 decision rendered by the Court of Justice of the European Communities in the SEVIC case, the Italian legislature has extended the application of the principles set forth by the Directive to any cross-border mergers concerning at least two EU companies, even where they involve also an Italian commercial partnership or a non-EU limited liability company (provided that the transaction is governed by equivalent rules under the domestic law of each of the other Member State companies concerned).

The attached memorandum provides an overview of the new Italian rules, highlighting their innovative import against the background of the legal regime previously applicable to cross-border mergers involving Italian companies.