Part XI — Part XI — Merger of Companies
Article (312)
i— Merger shall be effected in one of the following two methods:1— Acquisition, which is winding up a company or more and transferring its patrimony to an existing company.2— Consolidation, which is winding up two or more companies and incorporating a new one to which the patrimony of the merged companies shall be transferred.ii— Each company shall pass a resolution of merging in accordance with the amendment procedures of its Memorandum and Articles of Association.In all cases, merger shall not result in monopolizing an economic activity, a commodity or a certain product.
Article (313)
The following provisions shall apply to merger by way of acquisition:
i— The merged company shall pass a resolution to dissolve itself.ii— The merged company shall be evaluated in accordance with the provisions of this law governing the evaluation of in-kind shares.iii— The merging, or emerging, company shall pass a resolution to amend its capital in accordance with the evaluation results of the merged company.iv— The capital increase shall be distributed among the partners in the merged company in proportion to their respective shares therein.v— If the stakes are represented in shares, they may be traded upon their issue if one year has lapsed since the incorporation of the merging or emerging company.Article (314)
The following provisions shall apply to merger by way of consolidation:
i— Each merged company shall pass a resolution dissolving itself.ii— A new company shall be incorporated in accordance with the provisions of this law. However, if the new company is a joint-stock company, the experts' report on the evaluation of the in-kind shares shall be relied upon according to article (99) of this law.iii— Each merged company shall be allotted a number of shares or stakes equal to its shareholding in the new company's capital. These shares shall be distributed among partners in each merged company in proportion to their respective shares therein.Article (315)
Merger shall be published in the Official Gazette and in one of the local daily newspapers, and shall be recorded in the Commercial Registry.
Holders of rights established before the publication of merger may object thereto within sixty days from the publication date by a registered letter with a delivery note. In this case, the merger results shall not be binding them unless the creditor gives up his objection, or the court, upon filing an action by the company, rejects it, or the company pays the debt if it is due or provides adequate guarantees for its settlement if it is not due.
If no objection is made within the period referred to in the preceding paragraph, the merger shall be effective towards the creditors, and the merging or emerging company shall subrogate the merged companies in all their rights and obligations.
Article (316)
In the case of merger by way of acquisition, the capital shares of the merged company, if it is one of those companies whose shares are tradable, may be traded upon their issue if one year has lapsed since the incorporation thereof.
In case of merger by way of consolidation, the shares of the new company may be traded upon its issue if one year has lapsed since the incorporation of each of the merged companies.
Article (317)
For a joint-stock company, which has borrowed by issuing bonds, to merge, the board of bondholders shall approve the merger resolution by the majority of those representing two-thirds of the loan bonds, otherwise the company shall settle the debt in a way the board accepts by the majority referred to above.
If the board does not approve the merger or the settlement, or if it is impossible for the board to convene, the representative of the board must object to the merger resolution in accordance with the provisions of article (315) of this law.
Article (318)
If the joint-stock company under merger has issued bonds convertible into shares, the bondholders shall have the right to request for converting their bonds into shares in the merging company or the new company as the case may be within the time limit specified in the bond issue. The conversion principles shall be set by determining the exchange rate mentioned in the issue system in light of the percentage specified in the merger agreement for the replacement of the shares in the merged or emerging company with shares in the company issuing the bonds.
