M&A Deals in Austria

The Australian M&A market has been growing steadily over the past few years. There has also been an increase in the number of M&A deals in the technology & construction sectors. 

Just like in other countries, concluding M&A deals in the Republic of Austria requires sellers & purchasers to sign an SSA. Transferring ownership of shares of Austrian companies is a common practice in transactions involving real estate objects or TMs. What makes it particularly popular among investors is that it eliminates the need for translation of the required documents into German prior to submitting them to the relevant registers.

Selling assets of Austrian companies is done either by holding an auction or negotiations between sellers & purchasers. In the first case, an IM is put together, following which an initial offer is made & potential buyers are shortlisted. After that, potential purchasers may proceed with performing DD of an M&A transaction in the Republic of Austria. After DD is completed, bids are usually submitted & agreements drafted. On average, it takes from three to six months to auction Austrian companies’ assets.

Austria: Regulation of M&A Transactions

The four most important laws regulating M&A deals in Austria are:

• LLC Law;
• JSC Law;
• ACCG;
• AGCC.

Normally, selling Austria-registered businesses is regulated by Austrian legislation; however, an SPA can sometimes be regulated by foreign legislation as well. Purchasing Austrian firms’ assets is even less likely to be regulated by foreign legislation because it requires compliance with Austrian legal formalities

Austria: Purchasing Shares of Companies

Selling Austrian firms’ shares or purchasing Austrian firms' assets implies purchasing title that’s transferred upon a transsaction’s completion. If companies’ stakes are owned by trustees, they have a right to beneficial ownership; however, they’re deemed shares’ legal owners from the perspective of civil law.

Several Sellers

If a single stakeholder owns ninety percent of a company’s shares, they may request that a meeting of stakeholders be convened. Also, at their request, a meeting may force out minority stakeholders & provide them with adequate monetary compensation.

Liabilities & Assets

Conducting an M&A transaction in Austria implies that any legal relationships related to the business, including associated obligations, automatically pass to purchasers (unless otherwise agreed by purchasers & sellers). 3rd parties that disagree with it can file an objection within 90 days after receiving written notice of a deal. However, they should keep in mind that several & joint liability of purchasers of assets/companies is provided for in the AGCC, which can’t be excluded against 3rd parties.

Registering Austrian LLCs & transferring Australian LLCs’ shares may require shareholders’ approval. As far as the transferring of business in the Republic of Austria is concerned, legal relations are transferred automatically. Pursuant to the Lease Act, lease contracts provide for a change in control, providing lessors with a right to increase lease rates if the existing rates aren’t on the par with the market ones.

Regulations

Transferring stakes of Australian LLCs requires registration with Austria’s Companies Register; however, registration procedure is purely declarative. Issuing registered shares is required for unregistered JSCs.

Transferring business in the Republic of Austria also requires registration with Austria’s Corporate Register. As in the case with transferring stakes, registration is purely declarative. Should sellers & purchasers reach an agreement about excluding purchasers’ liability for all or some of the obligations, they must register such a decision in the registry.