Merger
The merger according to the Companies Law No. 159 of 1981 is that by a decision of the Chairman of the General Authority for Investment, Joint Stock Companies, stock partnership Companies, Limited partnership companies, Limited liability Companies, Partnership companies whether Egyptian or foreign, which operate in Egypt, may merge into an Egyptian joint stock company or merge with one or more companies and form a new Egyptian joint stock company.
Methods of Mergers:
There are two ways of Merging, namely merging by annexation or by mixing, and they are as follows:
1-Merger by annexation:
It is the dissolution of one or more companies and the transfer of their funds to another company that fully fulfills the rights and obligations of the dissolved company.
2-Merger through mixing:
It is the dissolution of two or more companies and the establishment of a new company to transfer the rights and obligations of all companies dissolved.
Draft merger contract
First:-
The Company’s Board of Directors or Directors shall, as the case may be, prepare the draft merger contract and shall include the following:
- The reasons for the merger and its purposes and the conditions on which it is based.
- The date used to calculate the assets and liabilities of the merged companies.
- Initial report on the value of the assets and liabilities of the merged companies.
- To determine the rights of each of the shareholders or partners in the merged company and the merging company.
The draft contract shall be accompanied by a report on the basis on which the initial report of the assets and liabilities of the merging and integrated companies was prepared.
Second:-
It is checked whether the assets and liabilities of the companies wishing to merge have been properly assessed in the merger contract project.
And this is done by submitting a request to the General Authority for Investment to return the report and receive the final report from the Authority for Assets and Liabilities, which is based on it.
Third:-
The Board of Directors or the directors shall submit to the competent auditor in each company incorporated the merger contract project and its attachments and the report prepared by the competent committee of the General Authority for Investment for the assets and liabilities of the merged companies before the date of the Ordinary General Meeting of Shareholders to consider the merger contract by 60 days at least.
The auditor reports on the manner in which the merger takes place.
The auditor’s report shall be prepared and filed at the company’s headquarters before the extraordinary general assembly meeting to consider the draft merger contract with at least fifteen days and each shareholder is entitled to obtain a copy thereof.
The decision to merge:
The merger shall be effected by a decision issued by the extraordinary general assembly of each of the companies that decided to merge into another or the companies that decided to be incorporated therein, regardless of the methods of incorporation.
The vote on the decision to merge in the extraordinary general assembly of such companies shall be by a three-fourths majority of the capital of the shares represented at the meeting.
Shareholders or partners who have opposed the merger decision may request that they prove their objection to the minutes of the extraordinary session of the General Assembly.
In addition, a person who attends the extraordinary general assembly due to an acceptable excuse may notify the company’s board of directors or its manager, as the case may be, with a letter of recommendation accompanied by the acknowledgment of the nature of the excuse and notify them of their desire to leave the company and the board of directors or managers, as the case may be.
Within 15 days from the date of the arrival of a letter, whether his excuse is acceptable according to the rules of the company . In case of disagreement, the matter shall be referred to the judiciary to prove whether the excuse is acceptable or not.
In all cases, shareholders and partners wishing to exit must submit a written request to the Company either by registered mail or by hand within 30 days from the date of the merger decision in the Commercial Register. The application shall indicate the ownership of the shares or shares of the company.
The Board of Directors or the Director declares the partners or shareholders who have chosen the exits at the value that the Company estimates for their shares and shares on the basis of the current value of all the Company’s assets and informs them of the date on which the amounts are placed at their disposal
In case of disagreement between the shareholder and the chairman or the manager on the value of the report, the matter shall be referred to the judiciary
The value of the shares or shares of the exits must be performed before the merger proceedings are completed
If the merger results in an increase in the obligations of the shareholders or partners of the Company
Or more of the merged companies, the voting in the Extraordinary General Assembly shall be approved by the shareholders’ agreement or the partners. The debt shall increase the merger of their obligations
The merger may take place even if the merged company is in the liquidation stage provided that the liquidation decision is canceled
Merger procedures:
If the merger results in the establishment of a new joint stock company, the company’s incorporation procedures shall be followed in accordance with the Companies Law No. 159 of 1981.
If the merger is in an existing company, the merger contract must be submitted accompanied by the company’s system in which the merger takes place after being approved by the competent committee of the General Authority for Investment. In all cases, the decision of merger must be issued by the Minister of Investment after the approval of the competent committee in the General Authority for Investment
The merged company or the company resulting from the merger shall be considered to be the successor to the merged companies and shall be replaced by legal solutions with no rights and obligations within the limits agreed upon in the merger contract without prejudice to the rights of the creditors
The shares of the Company arising from the merger or shares that are issued against the capital of the merged company may be traded as soon as they are issued
The merged companies and their shareholders shall be exempted and the incorporated company or the company resulting from the merger shall be exempted from all taxes and fees due to the merger
By. Dr. Mahmoud Mostafa
