2.3.3 Second Company Law Directive

The Commission of the European Communities followed the recommendation of the Winter Committee to introduce squeeze-out rights and sell-out rights in the context of listed companies. In September 2004, this Commission proposed an amendment of the Second Company Law Directive. This proposed directive included a squeeze-out right and an appraisal right, comparable to the squeeze-out right and appraisal right under the Thirteenth Company Law Directive. These rights would apply outside the context of a takeover bid, but are restricted to listed companies.1 With the introduction of the appraisal right, the balance between the squeeze-out right and the appraisal right was recognized. The appraisal right was motivated as the quid pro quo, as something for something, i.e. to balance the squeeze-out right conferred on the majority shareholder.2

Nevertheless, the provisions regarding the squeeze-out right and sell-out right were abolished in the subsequent text of the proposed amendment of the Second Company Law Directive. It was argued that, during the negotiations about the proposed directive, it appeared that the provisions did not fit the simplification objective of the proposed directive.3