Austrian law does not have one specific law regulating all issues on the acquisitions of companies, but rather various different statutes apply, depending on the specific type and form of an acquisition.

In particular, the following laws are relevant:

• Cartel Act (Kartellgesetz)
• Commercial Code (Unternehmensgesetzbuch)
• Commercial Register Act (Firmenbuchgesetz)
• Corporate Transformation Act (Umwandlungsgesetz)
• Demerger Act (Spaltungsgesetz)
• EC Merger Control Regulation (EU- Fusionskontrollverordnung)
• Employment Contract Adaptation Act (Arbeitsvertragsrechts-Anpassungsgesetz)
• EU Cross-Border Merger Act (EU Verschmelzungsgesetz)
• Federal Fiscal Code (Bundesabgabenordung)
• Flexible Capital Companies Act (Flexible-Kapitalgesellschafts-Gesetz)
• Foreign Trade Act (Außenwirtschaftsgesetz)
• General Civil Code (Allgemeines Bürgerliches Gesetzbuch)
• Joint Stock Corporations Act (Aktiengesetz)
• Income Tax Act (Einkommenssteuergesetz)
• Investment Control Act (ICA) (Investitionskontrollgesetz – InvKG)
• Limited Liability Companies Act (Gesetz über Gesellschaften mit beschränkter Haftung)
• Minority Shareholder Squeeze-Out Act (Gesellschafterausschlussgesetz)
• Real Estate Transfer Tax Act (Grunderwerbssteuergesetz)
• Reorganisation Tax Act (Umgründungssteuergesetz)
• Stamp Duty Act (Gebührengesetz)
• Stock Exchange Act (Börsegesetz)
• Takeover Act (Übernahmegesetz)
• Ultimate Beneficial Owners (UBOs) Register Act (Wirtschaftliche Eigentümer Registergesetz)
• Rules regarding specific regulated industries e.g., Banking Act (Bankwesengesetz)
• Insurance Supervisory Act (Versicherungsaufsichtsgesetz)

For asset deals, in particular the provisions of Section 1409 of the General Civil Code and Section 38 of the Commercial Code are of major importance. Section 1409 of the General Civil Code provides that a purchaser generally is jointly and severally liable with the seller towards the seller’s creditors for any liabilities of the business acquired having originated prior to the acquisition. The purchaser’s liability is limited to the current net asset value of the assets acquired and applies in case the purchaser knew or should have known of the pre-existing liabilities at the time of the purchase. Section 1409 of the General Civil Code is mandatory law and cannot be waived – or amended at the expense of creditors – by contract. Liability can be reduced if the purchase price payable by the buyer is used to pay off the debts of the business sold.

In addition to Section 1409 of the General Civil Code also Section 38 of the Commercial Code contains special liability provisions for asset deals. Even if the buyer is not liable under the General Civil Code because, for example, the purchase price was used to pay off the debts of the business sold, the buyer still might be liable under the Commercial Code. Section 38 of the Commercial Code provides that a purchaser who acquires and continues a commercial business is liable for all debts the former owner incurred in the course of conducting the business, including even those which are not contractually agreed to be taken over by the buyer. Unlike liability under Section 1409 of the General Civil Code, liability under the Commercial Code is not limited to the value of the acquired assets. Nevertheless, under Section 38 of the Commercial Code the seller and the buyer can agree to limit the liability of the buyer, such (general) limitation of liability, however, being only valid if it is made public without delay after the closing of the transaction. The publication can occur through the commercial register or through the free digital EVI-interface under <evi.gv.at>, which replaced the Vienna Gazette (Wiener Zeitung) in July 2023. In addition, the liability can also be excluded towards individual creditors if they are notified individually without delay after the closing of the transaction.

Section 38 of the Commercial Code also addresses an important aspect in asset deals, i.e. the transfer of agreements connected to the business which is to be acquired. The relevant provision states that in case of doubt all legal relationships of the seller, which are connected to the business, are transferred to the buyer, together with all rights and obligations attached thereto, provided that the business is continued by the buyer.

Excluded are legal relationships being personal in nature. In addition, special provisions may apply to certain legal relationships (for example the Austrian Trademark Act provides rules for the automatic transfer of trademarks; the Austrian Lease Act provides rules for the automatic transfer of lease agreements). The parties are free to exclude the transfer of all or some legal relationships. Furthermore, the contractual counterparties of the seller’s business have the right to object to the transfer of the contract within three months after having been notified of the transfer.

In addition, there are special liability provisions under the Federal Fiscal Code (Bundesabgabenordnung), the General Social Insurance Act (Allgemeines Sozialversicherungsgesetz) and the Employment Contract Adaptation Act (Arbeitsvertragsrechts-Anpassungsgesetz), which also contains rules on the automatic transfer of employment agreements.

Regarding the transfer of shares in Austrian limited liability companies (Gesellschaft mit beschränkter Haftung), the Limited Liability Companies Act requires that the transfer be executed in the form of a notarial deed. Therefore, the involvement of an Austrian notary public or a notary public subject to a comparable regime (e.g., a German notary) is necessary with exception of the transfer of shares in the new company form FlexCo, for which a notarial deed is no longer required. Cross-border transactions are facilitated since notarial deeds can be drawn up in any language if the parties explicitly request so and if the notary public or the respective substitute is a certified translator before an Austrian court regarding the requested language. Moreover, notarial deeds can now be drawn up by the means of electronic communication.

A key regulatory authority with regard to M&A transactions is the Federal Competition Authority (Bundeswettbewerbsbehörde), which is competent for the clearance of mergers if the transaction volume does not exceed the thresholds of the EC Merger Control Regulation, but exceeds the thresholds under Austrian competition law.

Under the domestic merger control regime a transaction has to be notified to the Federal Competition Authority under Austrian competition law if the following conditions are met and no exception applies: (i) the combined worldwide aggregate turnover of all participating undertakings in the year prior to the transaction was more than EUR 300 million; (ii) the combined domestic aggregate turnover of all participating undertakings in the year prior to the transaction was more than EUR 30 million and the turnover of at least two undertakings exceeded EUR 1 million each; and (iii) the worldwide turnover of at least two participating undertakings each was more than EUR 5 million in the year prior to the transaction. The requirement in item (ii) that at least two of the companies involved must each also have generated domestic sales of more than EUR 1 million was introduced in 2021. This aims at excluding mergers where the target has no relevant domestic turnover and the merger would only need to be filed in Austria because the purchaser had a turnover of more than EUR 30 million in Austria.

The main exception, under which no merger notification needs to be filed, despite the thresholds set forth above having been met, is the following: The transaction does not need to be notified if in the year prior to the transaction (i) only one independent undertaking had a domestic turnover of over EUR 5 million, and (ii) the other participating undertakings’ combined had a worldwide aggregate turnover not exceeding EUR 30 million. However, even if the thresholds set forth above are not met, transactions which meet the following conditions, also need to be notified to the Federal Competition Authority: (i) the combined worldwide aggregate turnover of all participating undertakings in the year prior to the transaction was more than EUR 300 million; (ii) the combined domestic aggregate turnover of all participating undertakings in the year prior to the transaction was more than EUR 15 million; (iii) the value of the consideration for the transaction is more than EUR 200 million; and (iv) the target company has significant operations in Austria. Special rules on turnover calculation exist for the banking, insurance and media sectors. A further relevant authority regarding cartels and merger control is the Cartel Court (Kartellgericht).

The Austrian Cartel Act, which not only deals with merger control issues but also cartel issues, contains provisions which make it distinctively “green”. Section 2 para 1 of the Cartel Act expands the few legal exceptions to the ban on cartels: Cartels now are also exempted from the prohibition if their profits make a significant contribution to an ecologically sustainable or climate-neutral economy. The provision thus creates legal certainty and a free space for entrepreneurial cooperation in favor of sustainable agreements that would otherwise be prohibited under national law. However, it would also be desirable to create a clear “safe harbor” for Austria by using the authorization for block exemption regulations.

There is also a substantive review criterion that allows the prohibition of mergers. As an alternative to the prohibition of a merger which creates or strengthens a dominant position, mergers can already be prohibited if a significant impediment to effective competition is to be expected as a result. However, there are additional justification criteria. In certain cases, the Cartel Court is given the option not to prohibit a merger where an improvement of competition is to be expected which outweighs the disadvantages, where the economic advantages of the merger substantially outweigh the disadvantages.

As regards the main criterion for the prohibition of a merger, i.e. the creation or strengthening of a dominant position, there are two significant criteria, which are relatively new, since they have been introduced in 2021 only. First, companies are also deemed to hold a dominant market position if they have significant access to the market or to data of particular competitive relevance, for example, due to their intermediary services for other companies. Second, the concept of market dominance has been further tightened by the concept of relative market power. According to Section 4a of the Cartel Act, a company is also considered to have a dominant market position if it has a superior market position in relation to its customers or suppliers. Thus, the legislator has addressed typical market power structures of the digital platform economy.

Other relevant authorities are the Commercial Register Courts (Firmenbuchgerichte), which register and publish transactions and reorganizations in the Austrian commercial register, and the Financial Market Authority (Finanzmarktaufsicht), which reviews banking acquisitions.

Public M&A transactions regarding listed joint stock corporations (Aktiengesellschaft) are also subject to the supervision of the Austrian Takeover Commission (Übernahmekommission), which monitors compliance with the Austrian takeover regulations and decides on all matters related to the Takeover Act.

Foreign Direct Investments are regulated by the Austrian Investment Control Act (ICA) (Investitionskontrollgesetz – InvKG), which aims to prevent the “sell-out” of the Austrian economy in strategic areas. The ICA implements the FDI Screening Regulation (Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments, i.e., non-EU/EEA/Swiss, individuals or corporations into the European Union) and significantly expands the control over foreign investments both in terms of scope and procedure. This includes a more comprehensive, EU-wide coordinated control of third country investments in system-relevant Austrian companies.

A “foreign direct investment” is subject to the approval of the Federal Minister for Digital and Business Affairs (Bundesministerin für Digitalisierung und Wirtschaftsstandort) if the following criteria are met: (i) the target company is active in one of the sensitive or system-relevant areas listed in the Annex to the ICA; and (ii) certain voting right thresholds are reached or exceeded or otherwise a controlling influence is acquired or a controlling influence on parts of the company is acquired through the acquisition of significant assets.

A basic distinction is made between “particularly sensitive sectors” and other areas where a threat to security or public order may arise. For “particularly sensitive sectors” the voting right thresholds are 10 %, 25 % und 50 %, whereas for the other areas only the higher thresholds of 25 % and 50 % apply. Examples of “sensitive or system-relevant areas” are defense equipment and technologies, the operation of critical energy infrastructure and critical digital infrastructure, water, research and development in the fields of pharmaceuticals, vaccines, medical devices and personal protective equipment.

The application for approval must be submitted immediately after the conclusion of the agreement (signing / commitment to the transaction) or, in the case of a public offer, immediately after the announcement of the intention to acquire. The obligation to submit an application generally applies to the acquirer(s).

Information on the acquirer (including the beneficial owner), the target company and the transaction structure, as well as information on the business activities of the acquirer and the target company (including a description of the market and competitors) must be set out. Furthermore, the application for approval must contain information on the financing of the transaction and the origin of the financial sources, as well as – if foreseeable – information on whether effects on “programs of European interest” are to be expected (see in detail Section 6 para 4 no. 1 to no. 10 of the ICA).

A viable alternative to making an application for approval after signing can be the possibility of obtaining a clearance certificate (Unbedenklichkeitsbescheinigung). Within two months of receipt of the complete application for a clearance certificate, either a clearance certificate is issued or a notification is given that the application will be treated as an application for approval. If no decision is issued or notification is given within this two-month period, the clearance certificate is deemed to have been granted.

This clearance certificate alternative opens up the possibility to achieve clarity at an early stage of the transaction.

With regard to FDI screening on EU level, the 2026 regulation, currently available as a draft of the Council of the European Union (20204/0017 COD), will repeal Regulation (EU) 2019/452. Further, the new 2026 EU FDI screening regulation will mandate that all EU Member States implement national screening mechanisms covering a unified minimum scope of sensitive sectors, including hyper-critical technologies, critical infrastructure, and strategic raw materials. The new framework will further close regulatory gaps by extending jurisdiction to intra-EU investments under the control of non-EU entities, while standardising procedures with a two-phase review process (consisting among others of ex-ante reviews).

Implementation of regulatory changes

The Start-Up Promotion Act, which came into force on 1 January 2024 is not a separate legal act, but introduced tax incentives for employee participation in start-ups to increase employee loyalty and, in particular, address the so-called “dry income problem”. The dry income problem has arisen in cases where start-ups and young SMEs lacked liquidity and were, therefore, unable to provide monetary compensation for highly qualified employees. When this was compensated for by granting equity shares, immediate taxation resulted in an additional liquidity burden for the recipients, thus creating the dry income problem.

Under the new regulations, employees who acquire shares in a company within ten years of its founding – provided the company is of limited size (a maximum of 100 employees or annual revenue of up to EUR 40 million, with no corporate affiliation) – can opt for special tax treatment. These shares must be transferable only with the employer’s consent (restricted transferability) and may be received either free of charge or for a maximum consideration equal to their nominal value.

This special tax treatment means that the shares are only considered as received at the time they are sold or in certain other special cases, such as a transfer back to the employer, termination of the employment relationship or the removal of the transfer restriction. Additionally, 75% of the income from the sale of the shares can be taxed as other compensation at a fixed tax rate of 27.5%, provided that the employment relationship has lasted for at least two years and the receipt occurs at least three years after the initial issuance of the start-up employee participation to the employee.

The most significant legal development in Austria in recent years has been the establishment of a new company form – the Flexible Company (FlexCo), based on the Flexible Capital Companies Act, which entered into force on 1 January 2024. This new form is intended to be particularly attractive for start-ups and early stage founders. The new form of capital company is based on the law of the Austrian limited liability company with the inclusion of flexible structuring options from the law of Austrian stock corporations. The influence of the provisions of the Austrian Stock Corporation Act can be seen in the provisions on the acquisition and holding of treasury shares, authorized capital and conditional capital increases. The FlexCo aims to combine the best of both worlds in a single corporate form. In particular, the flexible instruments of the Austrian stock corporation for carrying out capital increases, such as authorized capital, which are of great practical relevance for start- ups, are now more accessible. The latter is the result of the lawmaker giving special focus to facilitate employee participation in the share capital of the company by special participation shares that can be transferred by simple written form, but which do not confer voting rights.

The FlexCo allows for establishing a company with limited liability, which only has one shareholder and who is also the sole managing director, in a simplified manner by means of a simple electronic submission.

As regards the criteria which have to be fulfilled by managing directors of a limited liability company, Section 15 (1a) GmbHG, which is based on Article 13i of EU Directive 2019/1151 (parallel provisions exist for AGs, co-operatives and FlexCos), include objective exclusion criteria for managing directors.

Key features of Section 15 (1a) GmbHG are the following:

• Disqualification due to criminal convictions: Individuals who have been convicted of specific economic offences (eg, embezzlement, tax fraud) and sentenced to more than six months of imprisonment are automatically disqualified from serving as managing directors or board members for three years.
• Affected positions: The disqualification applies to managing directors of limited liability companies.
• Automatic exclusion and resignation obligation: Once a conviction becomes final, disqualification takes effect automatically. Existing executives must resign within 14 days. If they fail to do so, they will be removed from the Commercial Register by court order. However, acts of representation carried out by the disqualified authorized representative body remain effective.

The above is supplemented by an EU-wide information exchange. Austria’s Commercial Register Court can request information through the Business Registers Interconnection System (BRIS) to verify if an individual is disqualified in another EU or EEA country. Similarly, Austria must respond to inquiries from other member states. This enhances corporate integrity and transparency by ensuring that individuals with relevant criminal records cannot hold key leadership roles in Austrian capital companies.

With regard to equal treatment concerning management positions, the currently existing draft of the Corporate Leadership Positions Act (CLPA; Gesellschaftsrechtliches Leitungspositionengesetz) on 17 March 2026 passed the judiciary committee (Justizausschuss) and will be presented to the Austrian lawmaker, who is expected to adopt the draft. The CLPA aims to implement EU Directive (EU) 2022/2381, which mandates gender-balanced representation in the leadership bodies of listed companies. The primary objective of EU Directive (EU) 2022/2381 is to enforce the principle of equal opportunities and secure balanced gender representation at the top level of management by setting minimum targets. To this end, the Directive establishes a set of binding procedural requirements governing the selection of candidates for appointment or election as directors. These measures are designed to ensure that the recruitment process is transparent and merit based. Key Provisions of the CLPA draft include the following.

• In listed companies, the supervisory board must consist of at least 40% women and at least 40% men.
• If the management board of a listed company consists of more than two persons, it must include at least one woman. This requirement goes beyond the EU directive, aiming to improve the historically low representation of women in executive positions.
• If the gender quota is not met, the appointment of supervisory board members is invalid (“empty seat rule”).

Executive board members appointed in violation of the quota will not be registered in the company register.

Overall, the new regulations offer an internationally competitive option to innovative start-ups and founders in an early stage of their business.

The Austrian M&A market was notably affected by uncertain geopolitical tensions due to Russia’s invasion in the Ukraine, which was experienced in economic environments not only throughout Europe but also on a global level. In addition, the increasingly heated situation in the Middle East conflict also affected Austrian market participants. The consequences of these tensions on a macro-economic level were rising interest rates, high inflation as well as high energy prices due to energy and supply shortages. These factors then lead to an expected higher number of insolvency cases that were opened. In 2025 a total number of around 6,810 insolvency proceedings were opened, which is an increase of 3,4 % compared with 2024. The Austrian M&A market is considered to be among the more resilient domestic markets in the European Union, despite the downward trend concerning the number of transactions with Austrian involvement continued in 2025. Notably, however, the overall transactions volume in Austria in 2025 increased significantly compared with 2024.

Whereas in 2024, there were 245 M&A transactions involving Austrian companies, the number of transactions with Austrian participation fell to 221 in 2025 according to the M&A Index 2025 published by EY Austria (Ernst & Young Global Limited). The minus of 24 deals corresponds to a decrease of 9.8 % in M&A transactions.

Although the number of deals was negatively affected in 2025, transaction volumes sharply increased despite the complex and uncertain environment for M&A transactions. The total transaction volume considerably increased by 292 % from € 5 billion to € 19.6. billion.

The Austrian M&A market as far as transaction volume was concerned in 2025 was driven by three main deals, which together accounted for roughly 88 % of Austria’s total transaction volume. Representing the biggest transaction in 2025 with a transaction volume of € 8.9 billion, the merger of Borealis and Borouge and the acquisition of Nova Chemicals for EUR 8.9 billion represented a significant milestone in the Austrian M&A market, reflecting strategic considerations as a major driver behind M&A transactions. This also shows that strategic buyers are still considered to be the main actors on the Austrian M&A market. The second largest deal was the acquisition of a 49 % stake in Santander Bank Poland by Erste Group for € 7.0 billion and the takeover of NÜRNBERGER Beteiligungs-AG by the Vienna Insurance Group for € 1.4 billion. These transactions show that with regard to cross border transactions the participation of foreign direct investments by private equity investors is gaining speed in the domestic market.

The increase in transaction volume despite the more challenging market conditions is a positive sign for the Austrian transaction market and shows that buyers are confident in the domestic market and are willing to invest in the domestic market and. In general, many potential buyers are on the look-out for suitable acquisition targets. Especially strategic investors will be on the look-out and thoroughly check the liquidity situation of possible target companies. Given the current liquidity situation of some companies, it is to be expected that distressed M&A deals will rise in 2026.

In light of the uncertainties on the financial markets generally resulting from Russia’s invasion of Ukraine and the Middle Eastern conflict and the interlinked economic consequences such as significantly higher energy costs and high inflation, it remains to be seen what impacts these factors will have on M&A activities.

In terms of the number of transactions reported, the industrial sector took the lead in 2025 with 66 deals, closely followed by the telecommunications, media and technology (TMT) sector and consumer products & retail sector. In terms of published transaction volumes, the life sciences & chemicals sector with a transaction volume of over € 8.9 billion and the financial services sector with a transaction volume of over € 8.4 billion took the place of the usually strong TMT sector due to cross-border mega-deals. These figures highlight the significance of global interest in Austria’s M&A landscape.

Some economic sectors in Austria, especially the tourism and hospitality sector, which is known as one of the main pillars of the Austrian economy, experienced difficulties in the recent years, be it the restrictions during the COVID-19 pandemic or the general tense environment with respect to the far-reaching effects of the economic consequences of Russia’s invasion of Ukraine. However, the Austrian tourism and hospitality sector experienced a noticeable and ongoing recovery in 2024 and 2025 with reports of investments rising to € 215 million in the first half of 2025 which is an increase of 13 % compared to the first half year 2024. Rising tourist numbers, an increase in transactions, and renewed investor confidence are the defining features of the current landscape. Nevertheless, rising costs, changing financing conditions and structural risks are hindering growth.

The main driver of market value, accounting for 90% of the year’s total volume, were outbound deals, which accounted for around 35% of the total number of transactions in 2025. Austrian acquirers predominantly focused their high-volume investments on North America, particularly Canada, due to several large-scale transactions. Strategic investors continue to be a significant driver of M&A transaction in Austria. However, Germany remained the most popular destination for strategic expansion within Europe. By contrast, inbound activity accounted for almost half of all deals by volume, but saw a significant decline in total value compared to the previous year. Meanwhile, the domestic market remained relatively quiet. The highlight of inbound activity was the strong demand for Austrian innovation. High-profile exits, such as the sale of Frauscher Sensortechnik to Wabtec for EUR 675 million and of TTTech Auto to NXP for EUR 603 million, emphasize the ongoing strategic importance of Austrian high-tech companies to international conglomerates.

M&A transaction continue to take place at a fairly robust pace in Austria despite the effects of the most recent geopolitical challenges. Many companies are restructuring themselves due to the uncertain economic situation, and thus are looking for strategic acquisition targets or for opportunity for divesting parts of their business to realign their portfolios.

The Austrian M&A landscape through 2027 is increasingly defined by a convergence of demographic necessity, acute geopolitical instability, and a heightened focus on national economic security. Primary among these factors is the accelerating “succession cliff” within the Austrian Mittelstand. As thousands of small-to-medium enterprises face a lack of intra-family successors, the market is shifting from traditional inheritance toward structured corporate transactions. In the current economic climate, characterized by the Middle East crisis and the resulting volatility in global markets, these family-run firms face mounting pressure. Legally, this manifests in an increasing requirement for sophisticated “carve-out” structures and transitional governance agreements to preserve the operational integrity during periods of uncertainty.

Secondly, the escalation of the Middle East conflict will trigger a structural reset in energy-driven deal making. Rising energy prices have moved from a cyclical concern to a permanent factor in legal due diligence and valuation. The “energy nexus” now dominates the industrial sector, where high electricity and gas costs are causing a sharp “brown discount” on energy-intensive targets. Conversely, this instability has accelerated M&A activity in renewable energy and green technology, as firms seek “energy sovereignty” through the acquisition of decentralized power assets.

Finally, it is to be expected that based on the Austrian Investment Control Act (ICA) in response to the Middle East crisis and the threat to critical supply lines, the Austrian Federal Ministry of Labour and Economy will tighten its scrutiny in relation to transactions concerning “critical infrastructure.” For non-EU investors, this necessitates a proactive regulatory strategy.

The key means of acquisition of publicly traded companies in Austria is the filing of a public takeover bid pursuant to the Austrian Takeover Act. The filing of a public bid is the usual method of acquisition, as the Austrian Takeover Act provides for a fair public tender process for such acquisition. The Takeover Act is applicable when the target company and its shares are listed in Austria.

Basic information on the target such as the company name, the type of corporation, the line of business, its managing directors and authorized signatories, its share capital, former reorganizations as well as its articles of association and its annual financial statements are publicly available.

Depending on the individual assets of the target company (e.g., real estate, patent, trademark), further information may be obtained from particular public registers such as the Austrian Land Register (Grundbuch) or the Patent Register (Patentregister).

Furthermore, all insolvency proceedings are registered with the publicly accessible Austrian insolvency data base.

In private M&A transactions, which is the dominant form in Austria, companies are not required to disclose diligence related information.

The managing directors of an Austrian company are required to keep company-related information confidential in the company’s interest. By way of exception, the disclosure of information to a potential acquirer is permissible if and to the extent this does not impair the interests of the company. In case of competing takeover bids which are subject to the Austrian Takeover Act, the management of the target company must treat each competing bidder equally if information is disclosed (in order to maximize the offer price in the shareholders’ interest).

Companies are also required to report their ultimate beneficial owners (UBOs) through the Austrian company service portal (the USP, which is operated by the Austrian Ministry of Finance). The reported information needs to be updated in case of changes and on an annual basis. The ultimate beneficial owner is – per definition – always a natural person, i.e. the natural person who ultimately owns or controls a legal entity. A company is considered to be owned or controlled by a natural person if this natural person holds a direct interest (capital or voting rights) in that company of more than 25 % or can exercise direct or indirect control over an entity which holds a direct participation of more than 25 % in such company. Control requires a participation of more than 50 % (capital or voting rights), the exercise of control within the meaning of Section 244 para 2 of the Austrian Commercial Code or the exercise of control via other means. There are also complex provisions on joint UBOs and the exercise of joint control. In the past the register of UBOs was freely accessible.

However, in late 2022 the Court of Justice of the European Union ruled in a case concerning a Luxembourg real estate company (connected case files C-37/20 and C-601/20) that certain provisions of the European anti-money laundering directives (Directive (EU 2018/843 and Directive (EU) 2015/849), which were the legal basis for Austrian ultimate beneficial ownership regulations, violate fundamental principles of data protection. As a result of that ruling the Austrian Ministry of Finance closed the register of UBOs for the general public. Since then, only certain entities (i.e. public authorities, credit or financial institutions) or certain groups of people (i.e. attorneys at law, notary publics, fiduciaries, tax advisors or auditors) have access to the register of UBOs. In addition, some or all entities or persons entitled to access the register of UBOs may be restricted from accessing the register of UBOs for a duration of five years if the ultimate beneficial owner asserts a sufficient legal interest in such restriction. Such sufficient legal interest may exist if facts justify the assumption that certain criminal offenses will be committed against the UBO if its identity became known and such danger can be prevented by restricting access to the register of UBOs.

In Austria due diligence procedures in most cases are conducted in a detailed manner. However, some companies prefer a two-step approach, meaning that in a first step a high-level due diligence analysis is conducted in order to identify red flags or deal breakers, and depending on the results of such first step analysis a more comprehensive and detailed due diligence analysis regarding the target is conducted in a second step.

The specific scope and level of detail of a due diligence procedure further depends on the size of the transaction and the business sector and also differs between private acquisitions and public takeovers. Due diligence analysis for private acquisitions are usually comprehensive (especially since financing banks usually request a detailed due diligence), while due diligence analysis prior to a public takeover are usually comparably limited.

One due diligence topic that is particularly important in Austrian transactions is the strict prohibition of the forbidden return of equity to shareholders (Verbot der Einlagenrückgewähr). This principle is applicable for all forms of limited liability companies and stock corporations established in Austria. Very briefly speaking and simplifying an otherwise complex issue, transactions between direct/indirect shareholders and the target (and sometimes also between sister companies) are null and void if based on the transaction the shareholder receives a benefit from the target which is not provided on an arm’s length basis, and, thus, would not have been conducted by management acting diligently, unless there is a justification in the interest of the target. Classic examples of a forbidden return of equity are the target selling goods to the shareholder at an undervalue or the target securing debts of the shareholder. This strict prohibition can also impact the protections a purchaser or seller needs to seek contractually.

As identifying risks within the target company is the main focus of due diligence, buyers should get familiar with the specific consequences of the EU Directive (EU) 2024/1760 on corporate sustainability due diligence (EU CSDDD). The CSDDD requires that Member States establish a framework for companies to integrate due diligence processes into their policies, carry out risk-based analyses of the activity chain and establish preventive measures and complaint mechanisms. Article 29 of the CSDDD establishes a civil liability for damages resulting from breaches of this duty. As is customary with EU legal acts, the respective sanctions shall be proportionate but not excessive. In the M&A context, this shifts the focus of due diligence from compliance with mere local regulations to a much broader global context. Among other things, missing data on suppliers will increasingly become an issue, as buyers must also ensure that a functioning risk management system is in place. In general, buyers should consider potential effects of the uncertain economic development for the target company in the due diligence process to determine whether the target company is adequately protected against any negative impact caused by potential energy shortages or supply difficulties. Disrupted supply chains, loss of production and decline in revenue, but also existing insurance policies, if any, measures ordered by public authorities, crisis management processes and remote working issues should be carefully reviewed.

In limited liability companies, which is the dominant corporate form in Austria, and the FlexCo shareholders typically have a very strong position and the shareholders’ meeting is the ultimate decision-making body of the company. While the managing directors are responsible for the management and the representation of the company, the shareholders have the right to issue instructions to the managing directors and typically have the right to approve or veto important matters regarding transactions as set forth in the articles of association.

Asset deals typically will require the approval of the shareholders. Share deals in private M&A transactions typically do not require the approval of the target company. Nevertheless, the articles of association of the target company may provide that the company itself has to approve the transaction.

If certain thresholds are exceeded (e.g., a company having more than 300 employees) a supervisory board needs to be established in limited liability companies.

In joint stock corporations, the decision-making process is different. Under the Stock Corporations Act, shareholders are not entitled to issue instructions to the board of directors, which generally acts independently. The board of directors is appointed and supervised by a mandatory supervisory board, which in turn is appointed by the general assembly of the shareholders. In private M&A transactions where the target is a stock corporation, the articles of association can foresee that an approval of the target for the transfer of the shares is required.

Mergers and other reorganizations, spin-offs or transformations require the approval of the shareholders.

The managing directors of limited liability companies (including the FlexCo) have to manage the company with the due care of a diligent manager, have to represent the company and are under the duty to act in the best interests of the company. The shareholders are entitled to issue instructions to the managing directors (see above question 8).

In stock corporations the board of directors has to manage the company, is responsible for officially representing the companies and managing the company’s business with the due care of a diligent manager, while the board of directors is not obliged to follow instructions issued by the shareholders (see above question 8). The board of directors needs to treat all shareholders equally and has to carry out the company’s business to the benefit of the company while taking the interests of the shareholders and of the company’s employees as well as the public interest into consideration.

If a controlling shareholding in a stock corporation that is listed at the Vienna Stock Exchange is to be acquired, the obligation to provide a mandatory offer that is subject to minimum pricing rules and cannot be made conditional (except for legal conditions such as regulatory approvals) is triggered. A shareholding of voting stock that exceeds 30 % is considered as a controlling shareholding pursuant to the Austrian Takeover Act (unless the articles of association provide for a lower threshold).

If an intended M&A transaction entails significant changes to the organizational structure (including redundancies affecting a certain percentage of employees), the works council (provided that such works council exists) has information and consultation rights and also may issue its opinion on corporate restructuring measures and may enforce a redundancy program, but cannot hinder the transaction as such.

Section 3 of the Employment Contract Adaptation Act provides for a mandatory transfer of all existing employment contracts (including benefits) pertaining to the entire business or the operational business unit sold (e.g., asset deal) or transferred (e.g., by a merger) to another company. In a share deal the benefit plans of the legal entity whose shareholder changes will continue to apply.

Furthermore, under the Takeover Act, the bidder and the management of the target company are obliged to notify their respective works council without undue delay about the public offer. However, the works council does not have a blocking right concerning an M&A transaction.

In private M&A transactions, conditions precedent are very common, in particular if the Federal Competition Authority needs to approve the transaction. Common conditions precedent are the clearance by the Federal Competition Authority or other authorities (e.g., the Financial Market Authority or land register approvals in case of buyers outside EU the EU), material adverse change clauses, bring-down certificates regarding representations and warranties and the execution of ancillary agreements.

For public M&A transactions, pursuant to the Austrian Takeover Act, a voluntary offer may be conditional, provided that the condition can be reasonably justified and the occurrence or non-occurrence of the conditions is not fully dependent on the discretion of the bidder. The condition that during the offer period no material adverse change occurs is allowed. Mandatory offers pursuant to the Takeover Act, however, cannot be made conditional (except for legal conditions such as regulatory approvals).

In private M&A transactions the acquirer often obtains exclusivity in the letter of intent, which prevents the seller for a certain period of time from engaging in negotiations with other potentially interested persons. To further strengthen deal exclusivity a contractual penalty can be foreseen in case the seller breaches the exclusivity obligation. However, under Austrian mandatory law judges are entitled to reduce a contractual penalty if the contractual penalty is considered excessive.

Termination or break-up fees that become due if the transaction with the acquirer is not completed can be contractually stipulated, but this does not occur frequently in Austria. There are also discussions in Austrian legal literature as to whether the promising of break-up fees is in compliance with the duties of a diligent manager, in particular if the break-up fees are triggered on the basis of facts or circumstances beyond the control of the party promising the break-up fee or if the break-up was caused by the other party. As regards the amount of the break-up fee, it can be problematic under Austrian law if it is purely punitive and goes beyond a compensation for sunken costs. The validity of such break-up fees depends on the particular circumstances of the case.

If the seller unjustifiably breaks off the negotiations the potential acquirer under certain conditions could be entitled to compensation claims based on culpa in contrahendo (violation of pre contractual obligations), a principle established under tort law. However, this is rare in practice, in particular since it is usual to agree in Letters of Intent or similar documents that such claims are excluded and negotiations can be terminated at any point in time.

The most common form of consideration in share and asset deals is cash payment. Acquirers also often seek to have a part of the purchase price put into escrow as security for potential warranty claims of the buyer. The escrow amount then is typically paid out to the seller after the expiration of the general warranty period in case no warranty claims have been filed.

Over the past few years the use of earn-out clauses (that are a preferred instrument of buyers) has increased, meaning that a part of the purchase price is only paid out post-closing if the target achieves certain milestones over a defined time period. Given the competing interests of sellers and buyers earn-out clauses bear a high risk of conflict.

If shares in a stock corporation that is listed on the Vienna Stock Exchange are being sold, any share transfer has to be reported within two trading days to the Vienna Stock Exchange, the Financial Market Authority and to the company whose shares are being transferred, if by such share transfer the shareholding of one shareholder reaches, exceeds or falls below 4, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 75 or 90%. The statutes of a listed company can provide for an additional threshold of 3 %. There are special rules for the treatment of derivatives, options and other instruments, the main aim of which is to prevent a circumvention of the notification requirements. If the notification obligations are not complied with, voting rights in excess of the relevant threshold cannot be exercised and are dormant.

Section 22 para. 2 Takeover Act stipulates that in case of an acquisition of a direct stake in a publicly traded (target) corporation that exceeds 30 % of permanent voting rights, the Takeover Commission has to be informed immediately and an offer to acquire the remaining shares must be made within 20 trading days. There are exceptions to the requirement of the filing of a mandatory offer, the most important of them being the existence of a larger shareholder. The increase of such controlling stake by way of “creeping in” (i.e. acquisition of shares which provide for additional voting rights of at least 3 % within a calendar year compared to the last day of the previous calendar year; acquisitions of shares within a calendar year may be set-off against sales during such calendar year; provided that the shareholder does not already hold more than 50 % of the voting rights of the target) also triggers a mandatory bid, and, therefore, public disclosure rules. However, since the amendment no mandatory offer needs to be filed if a creeping-in has been triggered before the subsequent mandatory bid has not resulted in the bidder obtaining an absolute majority of the voting rights. Even when a controlling stake in excess of 30 % is being held through one intermediary holding company, the disclosure rules apply. The direct or indirect acquisition of over 26 % but less than 30 % of the voting rights in a target company also triggers the obligation to notify the Takeover Commission. The voting rights in excess of 26 % are dormant, unless the Austrian Takeover Commission lifts the restriction. The restriction falls away as soon as a bid for the shares in the target company has been made and completed. Further, the voting rights are not dormant if certain exceptions apply, the most important being the existence of a bigger shareholder.

Pursuant to Section 5 para. 2. and para. 3 of the Takeover Act, if a listed company is involved, the bidder must immediately inform the public and the target if its management board and supervisory board have taken the decision to launch an offer or a situation has arisen which results in being obliged to launch a mandatory offer (see question 26 below). Furthermore, a potential bidder has to announce the intention to make an offer if the target’s share price fluctuates considerably or if there are rumors about an offer or speculation that an offer is to be launched and there are reasons to believe that this is due to the preparation of an offer, the fact that an offer is being considered or the purchase of shares by the bidder. The announcement does not need to contain details about the intended offer.

The bidder must notify the Takeover Commission of its offer and provide the Takeover Commission with the offer document within ten trading days (up to forty trading days if an extension is granted) after the bidder has announced its intention to launch an offer. The notification period for mandatory bids is twenty trading days and cannot be extended.

The bidder must publish the offer document (see question 22 below) together with the confirmation of an independent expert at the earliest on the twelfth trading day and no later than the fifteenth trading day after such documents are received by the Takeover Commission, if the publishing is not prohibited by the Takeover Commission. Such publishing triggers the offer period.

The offer needs to be published in a national newspaper that is available throughout Austria or in the form of a brochure that is provided free of charge to the public by the target company at its registered office and by the bodies instructed to pay the consideration. If the offer documents are not published in full in the digital EVI-portal (which replaced the Official Gazette of the Vienna Newspaper), at least information where the offer documents can be obtained needs to be published in such Official Gazette. If the bidder and/or the target company have a website, the offer document also has to be published on such websites.

The offer period has to be at least four weeks and can be for a maximum of ten weeks (the Takeover Commission can extend such offer period under certain circumstances). The result of the bid must be published immediately after the expiration of the offer period. In case of a mandatory bid or a voluntary bid aimed at controlling the target, the offer period is extended for three months from the date of announcing the result of the bid.

In case of M&A transactions involving listed companies or companies that have issued financial instruments trading on a regulated market in a member state or on an MTF or OTF it also needs to be considered when to make an ad hoc notification pursuant to Article 17 of the Market Abuse Regulation (EU 596/2014), which deals with inside information. In general, the Market Abuse Regulation assumes that every intermediate step of a stretched out process consisting of various steps as well as the whole process itself can constitute inside information if that confidential information is of a precise nature and if that information can have an impact on the price of the shares listed.

In case of M&A transactions the recent EU Listing Act (Regulation (EU) 2024/2809) overhauled the framework for European capital markets. The regulation will be effective on 5 June 2026. As concerns inside information in relation to protracted processes, the new EU Listing Act facilitated the M&A landscape as the disclosure obligation in protracted processes now attaches strictly to the final event or circumstances (eg, the signing of the definitive share purchase or merger agreement). Previous to that, the Austrian Administrative Supreme Court held that inside information in a protracted process also exists if the occurrence of the final event, i.e. the finalization of the transaction, cannot yet be reasonably expected, but a high price impact can be assumed if the information were to be published (Probability/Magnitude Test). However, the application of the Probability/Magnitude Test is highly disputed in Austrian legal literature and also has been rejected by the European Court of Justice. In essence, the Probability/Magnitude Test is no longer required to determine the public disclosure obligation, but will remain indicative for assessing inside information with respect to insider list and insider trading.

In practice, the parties involved often defer the required ad hoc notification according to Article 17 no. 4 of the Market Abuse Regulation, on the basis of which the notification may be delayed if the interests of the listed company or the respective market participant would be impeded by the notification, for example, if the transaction would otherwise fail, if the insider information can be kept confidential and the public would not be misled by the delayed disclosure. However, the risk of these conditions having been met rests with the parties being obliged to make the ad hoc notification.

No, there is no maximum time period for negotiations or due diligence by law. However, depending on the size of the target company, the structure of the transaction or the seller’s strategic motives, the seller might set such time limit individually. Typically, in a structured bidding process, the due diligence phase leading to a binding offer of interested bidders will be set at 4 to 8 weeks.

Bidders reaching the next stage of the sales process will typically have further opportunities to continue their due diligence during the negotiation phase until shortly before signing.

In the takeover of listed Austrian stock corporations, the Takeover Act foresees a sequence of mandatory deadlines for each stage of the proceedings to ensure swift completion (Section 3 no. 5 Takeover Act). In detail, once a bidder announces its intention to make a bid, it must file the offer document with the Austrian Takeover Commission (ATC) within 10 trading days (this deadline can be extended by the ATC to a maximum of 40 trading days). In case of mandatory offers the offer document needs to be filed with the ATC within 20 trading days after obtaining control over the target company.

The offer document thereafter must be published no earlier than 12 trading days and no later than 15 trading days after filing with the ATC, provided the ATC does not prohibit the publication of the offer document.

As concerns the acceptance period for the offer, the offer must remain open for at least 4 weeks and for no more than 10 weeks. If the target company can demonstrate that the acceptance period proposed by the bidder would unduly hinder its business operations, the ATC may set a shorter acceptance period for the offer; a reduction to less than six weeks is only permissible with the bidder’s consent. If a competing bid is launched, the initial offer period is automatically extended to match the competitor’s offer period to ensure shareholders can compare both. However, the acceptance periods for all offers for a target company must end no later than 10 weeks after the start of the acceptance period for the first offer. Where competing offers are in place, the ATC may grant a reasonable extension of the acceptance periods beyond ten weeks, provided that this does not unduly hinder the target company’s business operations.

For those shareholders which have not accepted the offer, the acceptance period is extended by 3 months from the date of announcement of the result of the offer, if: (i) a mandatory offer has been made; (ii) the bidder holds more than 90 % of the voting share capital following a voluntary offer; or (iii) a voluntary offer is conditional upon the achievement of a specified minimum threshold and this condition has been met.

In case the takeover bid is subject to conditions, the time period within which the conditions needs to occur needs to be reasonably justified. The justified term is to be determined on a case-by-case basis. Preferably, all conditions should be satisfied within the offer period. In a circular issued by the ATC, which in the meantime has been revoked again, a general maximum term of 90 trading days was said to be acceptable by the ATC. However, in case of mandatory requirements, like merger approval proceedings or other regulatory proceedings, a longer period may be required. In one case the ATC has already permitted a period of 150 trading days to obtain merger control approval. In any event, there is no fixed maximum term.

With respect to private M&A deals, no time limits exist.

As to the acquisition of shares in listed stock corporations, mandatory offers – and voluntary offers aimed at acquiring control – are subject to mandatory regulations regarding price building under the Takeover Act in order to ensure equal treatment of shareholders in case of a change of control. As a basic rule, the offer price for shares cannot fall below the highest consideration that was paid or agreed by the respective bidder within the previous twelve months before the offer was notified and also must at least meet the weighted average stock exchange quotation over the six months preceding the day on which the bidder announced the intention to launch an offer.

Many private M&A transactions contain the determination of a final purchase price based on closing accounts. In such cases sellers often seek to set a minimum price that must be paid for the shares.

No, target companies are in principle prohibited from financing or providing assistance in the financing of the acquisition of their own shares. Austrian law has strict rules on capital maintenance and therefore generally prohibits the return of equity to shareholders outside arm’s length transactions (Verbot der Einlagenrückgewähr), except for the distribution of the balance sheet profit, in the course of a formal reduction of the registered share capital or for the surplus paid to shareholders following liquidation (compare Section 7).

Furthermore, the Stock Corporations Act explicitly states in Section 66a that a target company is prohibited from financing or providing assistance in the financing of the acquisition of its own shares or the shares of a parent company.

Generally, the parties to a private M&A share purchase agreement agree on Austrian substantive law and dispute resolution in Austria. For the mode of transfer, which is necessary for the transfer of shares in a limited liability company, Austrian law is mandatorily applied. This means that the share purchase agreement for such transfers needs to be in the form of a notarial deed, which can be drawn up in any language and now can be done by use of electronic means of communication without the need for physical presence before the notary (see question 1).

The bidder must provide the recipients of a public offer with an offer document. The offer document is a formal legal document containing detailed information for the shareholders to decide if they want to sell their shares. The offer document must be prepared in accordance with the principles of the Takeover Act and the recipients must have sufficient time and information in order to be able to reach a properly informed decision about the offer.

Briefly speaking and simplified, the offer document needs to include the following information: (i) the content of the offer; (ii) legal information concerning the bidder and shareholdings in the bidder; (iii) the shares which are subject to the offer; (iv) the consideration offered for the shares as well as the valuation method; (v) if applicable, (in total or percent) the minimum and maximum amount of securities that the bidder undertakes to acquire; (vi) the number of shares in the target company already held by the bidder or parties acting in concert with the bidder; (vii) the conditions and reservations of withdrawal to which the offer is subject; (viii) information concerning the bidder’s intentions with respect to the future business activities of the target company and, to the extent affected by the bid, of the bidder, as well as information with respect to the continued employment of the target company’s employees and its management, including any intended significant changes in the terms and conditions of employment, including in particular the bidder’s strategic planning for the target company and the likely impact on jobs and locations; (ix) the time limit for the acceptance of the offer and for the payment of the consideration; (x) in case of consideration in the form of securities, information on these securities which needs to comply with the requirements for a prospectus; (xi) the terms and conditions of the bidder’s financing of the offer; (xii) information on the legal entities acting jointly with the bidder; (xiii) information on the compensation offered if rights in relation to the shares of the target company are removed as a result of the bid; and (xiv) information on the law governing the contracts which will be concluded between the bidder and the shareholders as a result of the acceptance of the bid and information on the place of jurisdiction.

The offer document must be prepared carefully, accurately and without omissions. The bidder also must appoint an independent expert to assess if the offer document is complete, in line with the legal requirements stipulated in the Takeover Act (especially with regard to the consideration that is offered) and if the bidder is capable of financing the offer. In addition, also the target company needs to appoint an independent expert who has to assess the offer and the target’s management and its supervisory board must issue responses to the bid.

Public offer documents can be downloaded from the website of the Takeover Commission (www.takeover.at).

Some follow-up documents also have to be filed with the Takeover Commission and published after such filing (e.g., note on the result of the tender proceedings).

The transfer of shares in limited liability companies needs to be executed in the form of a notarial deed and therefore an Austrian notary public (or a notary public subject to a comparable regime, such as a German notary public) has to be involved, with the exception of the FlexCo, where no notarial deed is required.

Furthermore, shareholders of limited liability companies and a FlexCo are registered with the Austrian commercial register. Changes have to be reported to the competent Commercial Register Court without undue delay, whereby the registration with the commercial register generally is only declarative and thus does not prove ownership. The notary fees typically depend on the purchase price.

The shareholders of joint stock corporations are not registered with the Austrian commercial register, but the owners of registered shares have to be registered with the share register of the company.

For each registration or change made in the commercial register, application fees have to be paid to the Commercial Register Court, whereby such fees typically are fixed at comparably low amounts.

In addition, regarding asset deals, the new owner of real estate has to be registered with the land register, whereby a fee for the land register registration (Eintragungsgebühr) as well as a real estate transfer tax (Grunderwerbsteuer) under the Real Estate Transfer Tax Act have to be paid.

As to share deals regarding a target that owns real estate, the real estate transfer tax (and no fee for the land register registration) has to be paid. However, the tax under the Real Estate Transfer Tax Act is only payable if the purchaser (alone or together with its affiliated companies pursuant to Section 9 of the Austrian Corporate Tax Act or through a fiduciary relationship) acquires more than 75% of the shares in the target company. The threshold previously amounted to 95 % an was lowered to 75 % by the Budget Accompanying Act 2025, which entered into force on 1 July 2025.

For asset deals, in principle value added tax has to be paid. Share deals are exempted from value added tax.

The Stamp Duty Act provides that certain contracts as well as contracts which contain certain provisions (e.g., suretyships, pledge agreements, assignment agreements, rental agreements) trigger stamp duty amounting to a percentage of the concrete consideration.

Regarding public bids, fees to be paid to the Takeover Commission depend on the transaction volume of the takeover.

Since the number of stock corporations listed on the stock exchange is limited in Austria and only a limited number of shares is held publicly, hostile acquisitions occur very seldom in Austria.

In public M&A transactions, the board of directors and the members of the supervisory board have to maintain neutrality when a public bid has been announced and they are in principle not allowed to take measures to deprive the shareholders of the opportunity to make a free and informed decision on the bid.

However, there are several options of defense against a hostile approach, whereby in particular the target’s organizational structure or capital structure can be organized in advance in line with a defensive strategy. The target also could look for a ‘white knight’ investor to fend off unwanted advances.

Staggered terms of office for the two-tier boards (board of directors and supervisory board) cannot hinder a hostile takeover as such but nevertheless could delay the establishment of complete control of the acquirer of the target, provided that the hostile bidder has not achieved a majority large enough to remove and appoint the members of the supervisory board at will anyway. Regarding the capital structure, the acquisition of own shares is – under detailed restrictions and subject to limited amounts – admissible pursuant to the Joint Stock Corporations Act and also employee stock-ownership plans are possible. A share buyback programme would be possible but since shares that are repurchased cannot exceed 10 % of the company’s shares, such defense measure is only limited. However, most defensive measures are subject to the approval of the general assembly of the target company, which makes defensive measures quite impractical.

A further possible defensive measure is lowering the threshold that triggers a mandatory bid obligation from the statutory 30 % to a lower percentage, while increasing the majority to remove supervisory board members to a higher majority (e.g., 75 %), making it more difficult to change the supervisory board members.

If a controlling shareholding of more than 30 % of the permanent voting rights in a listed joint stock corporation is directly or indirectly acquired, a mandatory offer needs to be submitted to the remaining shareholders, unless the articles of the target provide for a lower threshold. There are exceptions to this rule, the most important one of them being the existence of a larger shareholder. Mandatory offers are subject to minimum pricing rules, cannot be made conditional (except for legal conditions such as regulatory approvals) and cannot foresee a withdrawal right. Also a creeping-in can trigger a mandatory takeover bid (compare already Question 15).

If through a voluntary bid a bidder acquires a controlling stake of more than 30 % of the voting rights of the target company, a subsequent mandatory bid is triggered thereby if the voluntary bid did not fully comply with the requirements for mandatory bids, in particular as regards the pricing rules for mandatory bids.

Up to 2018 listed joint stock corporations could only be de-listed by, for example, merging them with a non- listed company (so called “cold de-listing”). The consequences of such cold de-listing were highly disputed, in particular with respect to the level of protection to be provided to the shareholders.

In 2018 the Austrian lawmaker reacted to this situation. Section 225 paragraph 2a of the Austrian Stock Corporation Act now stipulates that a takeover bid complying with the requirements for mandatory takeover bids needs to be filed for the shares of an Austrian listed stock corporation if a merger of that company would result in the shares in that company no longer being listed in an EEA member state. In the course of the takeover bid the shareholders have to be explicitly informed of the upcoming delisting of the shares. Further, pursuant to Section 240 Stock Corporation Act such takeover bid also needs to be filed if a listed entity is to be converted into a type of company not being capable of being listed at the stock exchange, e.g. if a stock corporation is converted into a limited liability company .

The filing of the takeover bid is a requirement for having the merger or the conversion of the company registered in the commercial register.

Under Austrian corporate law both the Limited Liability Companies Act as well as the Stock Corporations Act provide for minority rights, the extent of which depends on ownership thresholds.

Regarding limited liability companies, shareholders holding for example a minority of at least 10 % of the shares are entitled to call a meeting of the general assembly or to put a certain matter on the agenda of the general assembly. Also, shareholders – alone or jointly – representing at least one-third of the share capital are entitled to designate a minority representative in the supervisory board. In addition, the Limited Liability Companies Act determines certain matters that require at least a 75 % majority decision, which is why shareholders holding shares of more than 25 % have a so-called blocking minority (e.g., regarding the amendment of the articles of association).

As to joint stock corporations, a minority shareholder or a group of shareholders holding for example at least 5 % of the share capital may request the calling of a shareholders’ meeting or request that a certain matter be put on the agenda of a shareholders’ meeting. As a further example, a minority of at least 10 % of the share capital may request the dismissal of a member of the supervisory board by court decision for cause. As with limited liability companies, 25 % plus one vote of the share capital constitutes a blocking minority for certain matters requiring a 75 % majority decision.

Note, however, that the special participation shares in a FlexCo which may be issued (see Question 1) do not confer any voting rights.

Under the Minority Shareholder Squeeze-Out Act the majority shareholder that directly or indirectly owns 90 % of the shares in a limited liability company or a stock corporation can squeeze out the minority shareholders with a simple majority vote and the payment of fair compensation. The minority shareholders have no means to block the squeeze-out but can request a compensation review. If the articles of association of a company contain a provision regarding the amount of the compensation to be paid in case of a squeeze out, the contractual provision is not applicable in case the agreed amount is below fair value.

Regarding publicly listed companies, if the squeeze-out follows a public takeover offer not later than three months after the end of the offer period, there is a rebuttable presumption that the compensation is adequate if it is equal to the highest compensation that was paid during the offer period.

The articles of association can stipulate that a squeeze out pursuant to the Minority Shareholder Squeeze-Out Act is not permissible and that minority shareholders cannot be squeezed out.