Abstract:
The squeeze-out merger system is important to promoting the normalized voluntary delisting and deepening the registration-based IPO system reform. This article reiterates the importance of the squeeze-out merger for protecting minority shareholders and the capital market efficiency. By conducting a comparative analysis of the formally divergent yet functionally convergent development trends of squeeze-out merger systems in the U.S. and Europe, this study summarizes the implications for China. The paper points out that China should consider incorporating the squeeze-out merger and appraisal right systems into the simplified merger provisions under Article 219 of the new company law. Measures such as adopting a simple majority rule for minority shareholders, requiring acquisition plans to be filed with China Securities Regulatory Commission, and imposing insider supervisory responsibilities should be introduced to improve the compatibility of the squeeze-out merger with the existing legal framework. On this basis, the paper proposes correcting common deficiencies in the U.S. and European squeeze-out merger systems, such as insufficient constraints on controlling shareholders and low merger efficiency, by imposing special responsibilities on insider-friendly acquisitions to enhance the level of prevention for controlling shareholders. At the same time, reasonable threshold conditions should be set to ensure the formation of a differentiated structure primarily based on the appraisal right litigation and supplemented by the prohibition of merger litigation, ensuring that the squeeze-out merger system overall complies with economic efficiency.
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