Bhp Dlc Structure Sharing Agreement

However, the fact that most cross-border mergers do not take the form of a DLC and that some companies have decided to unite their DLC structures implies that there are also potential disadvantages for DLCs. These include:[5] For more details on the factors driving companies to terminate DLC structures, the Fortis press release of 28 August 2000, the presentation of Zurich Financial Services` share unification plan of 17 April 2000 and the management reports of Dexia, ABB and MeritaNordbanken of 1999. [5] DLC structures are effective mergers between two entities in which they are committed to combining their activities and cash flows, but retain distinct registers and identities of shareholders. A form of DLC provides that both companies transfer their assets to one or more joint subsidiaries. The holding company then returns dividends to the main companies that distribute them according to a predetermined ratio. On the other hand, instead of transferring assets, there may be contractual agreements to distribute the cash flow of the other`s assets. The activities of the two companies are closely coordinated and, in most cases, the companies have a common board of directors. Table 1 contains a list of 14 existing or recently harmonized DLC structures. [2] With one exception, all LCDs are the result of mergers between companies established in different countries. [3] A review of these cases suggests that, for a number of reasons, companies may choose DLC structures over conventional mergers:[4] The table contains all the DLC structures widely used in recent decades that could be identified from a number of sources. It excludes cases of twins who do not act separately.

For example, in the Anglo-Irish Wedgwood/Waterford merger, the shareholders of each company received an entity consisting of a stake in each company. A similar scheme was put in place when the Anglo-French company EuroTunnel was created. Unlike the cases examined in this document, the actions of companies do not act as differently as share shares cannot be distributed. The table also excludes cases of related companies that did not have identical dividend flows.