The New Law was published in the Luxembourg Official Journal on 26 February 2025 and will enter into force on 2 March 2025.
Here are 5 things you need to know to navigate the new regime.
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#1. Scope strictly limited to EU transactions involving limited liability companies
The newly adopted provisions amending the law of 10 August 1915 on commercial companies, as amended, establishes a special regime governing European cross-border mergers, transformations (also known as “migrations”) and demergers, involving a Luxembourg S.A (société anonyme), S.à.r.l (société à responsabilité limitée), or S.C.A (société en commandite par actions).
Domestic Luxembourg and cross-border mergers, transformations, and demergers involving third non EU countries, as well as any European transactions outside the defined scope of the New Law, will continue to be governed by the existing provisions.
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#2. An anti-abuse control conducted by the Luxembourg notary
An anti-abuse control will be conducted by the Luxembourg civil law notary, who may refuse to issue the necessary pre-certificate of merger, transformation, or demerger in the context of his or her legality control if there are serious suspicions that the operation is being carried out for abusive, fraudulent, or criminal purposes.
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#3. Right of withdrawal and challenge of the exchange ratio
Minority shareholders who voted against the transaction will have the option to sell their shares in exchange for cash compensation. Shareholders may also challenge the exchange ratio proposed in the draft terms of merger or demerger and claim for additional cash compensation within a month from the general meeting of shareholders. Such claim will have no suspensive effect on the operation.
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#4. Adequate safeguards for creditors
Creditors whose claims predate the date of publication of the draft terms of the operation and who can demonstrate that the operation threatens the recovery of their claims and that they have not received satisfactory guarantees from the company, may notify the company, and request the court to obtain adequate safeguards within 3 months of the date of publication of the draft terms.
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#5. Application of the new provisions from 1 April 2025
The new provisions will only apply to mergers, demergers, and transformations for which draft terms are published on or after the first day of the month following the entry into force of the New Law, i.e. from 1 April 2025.
In other words, the current rules will continue to apply to all mergers, demergers and transformations for which the draft terms are published before 1 April 2025.
Any questions?
At NautaDutilh, we understand that navigating the complexities of new regulations can be challenging for your organisation. We are here to help. Our team will guide you, to ensure your organisation meets all requirements smoothly. For personalised assistance, do not hesitate to contact one of our experts.
