
How do company mergers or acquisitions affect my HE project?
Managing an EU project comes with a lot of obligations, all detailed in the Grant Agreement (GA). One critical obligation is to promptly inform the granting authority and your project partners (if you’re in a consortium) of any significant changes in your entity’s structure, as stipulated in all GAs. Under the Horizon Europe (HE) programme, it is found under article 19.3:
Article 19.3: Information about Events and Circumstances Which Impact the Action
The beneficiaries must immediately inform the granting authority (and the other beneficiaries) of any of the following: (a) events which are likely to affect or delay the implementation of the action or affect the EU’s financial interests, in particular: (i) changes in their legal, financial, technical, organisational or ownership situation (including changes linked to one of the exclusion grounds listed in the declaration of honour signed before grant signature).
Understanding Mergers and Acquisitions
This means that any change in your CAP table such as adding a shareholder, considering a merge or an acquisition must be disclosed.
In simple terms, a merger is the process of combining two or more companies into a single entity, while an acquisition involves one company taking over another. Both scenarios can significantly impact your entity’s compliance with the grant agreement.
What to Do Next
- Review the Call Conditions: Begin by reviewing the specific conditions of the call under which you applied. Understanding these conditions is crucial for assessing how structural changes might impact your eligibility and compliance.
- Reassess your status: If you are considering a merger or acquisition, it is critical to reassess your status. For example, if you hold an EIC Accelerator grant in which maintaining SME status is mandatory, a merger or acquisition could jeopardize it. You will need to use the SME self-assessment tool available on the EU portal. This step is essential to ensure you still meet the necessary criteria.
TIP: Consider consulting with our experts first. They can provide valuable insights and help navigate the complexities of your situation to avoid putting your project at risk. - Inform the Granting Authority: As required by Article 19.3, promptly inform the granting authority (and other project beneficiaries, if any) about the changes in your entity’s structure. This transparency is important for maintaining compliance. In this respect, the granting authority will follow up with you to clarify the next steps, such as the SME check.
Special Impact on SMEs under the EIC programme
Each situation is unique. In some cases, you may be at risk of losing your SME status. For more detailed information and guidance, read our upcoming article on “SME Status Lost During Project” which will provide comprehensive insights and practical steps for your project.
Conclusion
Navigating mergers and acquisitions during an EU project can be complex, but with careful planning you can manage these changes effectively.
Seek expert advice to ensure the continued success of your project right here: hello@getpolite.eu.