Mergers are regulated under the Portuguese Companies Code as a mechanism of structural reorganisation that enables the integration of the assets and shareholders of two or more companies into a single legal entity. Portuguese law adopts a broad concept of merger, allowing both mergers by absorption and mergers by the formation of a new company, as well as mergers between companies of different legal forms.
From a legal perspective, a merger is characterised by the universal transfer of the assets and liabilities of the merging companies to the absorbing company or to the newly incorporated company, together with the allocation of equity interests to their respective shareholders. Such transfer takes effect by operation of law, without the need for individual transfer acts, distinguishing mergers from transactions such as asset sales or isolated assignments of assets.
The merger process begins with the preparation of a merger project. This document plays a central role, as it sets out all the essential elements of the transaction:
- the type of merger.
- the identification of the companies involved.
- the exchange ratio of the equity interests.
- the accounting effects; and
- any special rights granted to shareholders or third parties.
The importance of the merger project lies not only in its organisational function, but also in its informative purpose. It is since this document that shareholders, creditors and employees assess the impact of the transaction and decide whether to exercise the rights granted to them by law.
Once prepared, the merger project is subject to statutory disclosure requirements, ensuring transparency throughout the process. This stage is intended to guarantee that all interested parties have access to the relevant information before final decisions are taken.
The law places particular emphasis on the protection of corporate creditors, granting them, in certain circumstances, the right to oppose the merger or to require adequate guarantees.
Likewise, employees are entitled to information and consultation rights, reflecting the legislator’s concern to strike a balance between the freedom of corporate reorganisation and the protection of interests external to the company.
The merger must be approved by the general meetings of the participating companies through qualified resolutions, having regard to the structural nature of the transaction. These resolutions express the corporate will regarding the patrimonial and organisational integration of the companies involved.
Although the law provides for simplified regimes in certain contexts, the general rule is that a merger constitutes a profound change in corporate life, thereby justifying enhanced requirements for the formation of corporate consent.
A merger only becomes legally effective upon its registration with the Commercial Register. It is at this stage that its essential effects take place: the universal transfer of assets and liabilities, the allocation of equity interests and, where applicable, the dissolution of the absorbed or merging companies.
The registration therefore has a constitutive effect, operating as the final step of a complex process and the starting point of the new corporate reality resulting from the merger.
Conclusion:
Company mergers are a powerful tool for corporate reorganisation, but also one of the most demanding from a legal perspective. Their success depends on rigorous planning, strict compliance with statutory requirements and an integrated analysis of corporate, patrimonial and tax implications. When properly structured, a merger enables a strategic decision to be transformed into a legally secure and economically efficient integration.
Belzuz Abogados, S.L.P. – Portuguese Branch is an international law firm, headquartered in Madrid and with offices in Lisbon and Porto, with solid experience in advising national and international clients on corporate law matters. It advises on company mergers, corporate reorganisations and restructuring processes, ensuring rigorous planning, legal certainty and strategic alignment at every stage of the transaction.