Structure and process, legal regulation and consents

Structure

How are acquisitions and disposals of privately owned companies, businesses or assets structured in your jurisdiction? What might a typical transaction process involve and how long does it usually take?

Acquisitions and disposals can be either structured as asset deals or shares deals, depending on the interest of the potential buyer or the seller’s intention. Shares deals are usually preferred against a transfer of business structure, as the latter entail the joint liability of both the seller and the buyer for liabilities that relate to the specific business and have been created until the date of the transfer (article 479 of the Greek Civil Code). Nevertheless, a transfer of business can also be effected through a corporate transformation, which is more tax efficient and easier to complete as it entails the universal succession of the transferor by the transferee by operation of law.

Legal regulation

Which laws regulate private acquisitions and disposals in your jurisdiction? Must the acquisition of shares in a company, a business or assets be governed by local law?

There is no special legislation on M&A activity in Greece.

However, in relation to M&A transactions, the following laws generally apply:

  • for corporate aspects of transactions: Law 4548/2018 on Reform of the law of Sociétés Anonymes, Law 4072/2012 on private companies and Law 3190/1955 on limited liability companies (Greek Corporate Law);
  • for competition law issues: Law 3959/2011 on competition (Greek Competition Law) and Regulation (EC) 139/2004 (the EC Merger Regulation);
  • for takeover bids in listed companies: Law 3461/2006 transposing Directive 2004/25/EC into Greek law (Greek Tender Offer Law);
  • for disclosure obligations in case of acquisition of significant holdings in listed companies: Law 3556/2007 transposing Directive 2004/109/EC into Greek law (Greek Transparency Law);
  • Law 4601/2019 on corporate transformations (Greek Corporate Transformations Law);
  • the Income Tax Code (Law 4172/2013), which provides tax incentives in certain M&A cases; and
  • other special provisions of civil, commercial and tax law.

Pursuant to article 3 of Regulation 593/2008 on law applicable to contractual obligations (the Rome I Regulation), parties are free to choose the law applicable to their agreement. To the extent that the agreement refers to rights in rem on assets, including shares, which are considered located in Greece, such rights will be governed by Greek law. In light of this, the transfer agreement is most commonly governed by Greek law irrespective of the law chosen by the parties for the sales and purchase agreement.

Legal title

What legal title to shares in a company, a business or assets does a buyer acquire? Is this legal title prescribed by law or can the level of assurance be negotiated by a buyer? Does legal title to shares in a company, a business or assets transfer automatically by operation of law? Is there a difference between legal and beneficial title?

There is no distinction under Greek law between legal and beneficial title. M&A transactions in Greece refer to the acquisition of ownership over the shares or assets sold.

Multiple sellers

Specifically in relation to the acquisition or disposal of shares in a company, where there are multiple sellers, must everyone agree to sell for the buyer to acquire all shares? If not, how can minority sellers that refuse to sell be squeezed out or dragged along by a buyer?

This is not necessary or required by law, unless there is an erga omnes enforceable obligation included to this effect in the target company’s articles of association. The Greek Corporate Law explicitly permits these clauses to be included in a company’s articles of association.

However, in the case where the buyer acquires 95 per cent of the capital of the target company, minority shareholders have the right to sell their participation to the buyer within five years period of the date the buyer reached 95 per cent.

In cases where the target company is a listed company, the buyer acquiring a third of the capital of the target company is obliged to launch a mandatory tender offer with consideration thresholds provided for by law pursuant to the Greek Tender Offer Law. In the case of a Greek law tender offer, minority shareholders have a sell-out right after the buyer has reached 90 per cent, and the buyer, respectively, has a squeeze-out right.

Exclusion of assets or liabilities

Specifically in relation to the acquisition or disposal of a business, are there any assets or liabilities that cannot be excluded from the transaction by agreement between the parties? Are there any consents commonly required to be obtained or notifications to be made in order to effect the transfer of assets or liabilities in a business transfer?

In all cases of a business transfer either effected by a universal succession pursuant to the Greek Corporate Transformation Law or special succession (ie, pursuant to the Greek Civil Code by assigning each of the rights and assuming each of the liabilities of a specific business), the transferee (or the absorbing company or the new company, as the case may be) will acquire by operation of law all liabilities referring to the specific business pursuant to article 479 of the Greek Civil Code, in the case of a special succession transfer of business (as article 479 of the Greek Civil Code provides for the joint liability of both the seller and the buyer for liabilities that relate to the specific business and have been created until the date of the transfer) or the relevant provisions of the Greek Corporate Transformation Law, in the case of a transfer of business by universal succession. The transfer of all assets that refer to a specific business applies, as well, in the case of a corporate transformation, whereas in the case of transfer of business by special succession, assets can be excluded from the transfer.

With respect to consents required, in case of corporate transformations only the approval by the Ministry of Development for the perfection of the corporate transformation is required, following its approval by the general meeting of shareholders of the companies involved. In case of a transfer of business through special succession consents must be requested by the creditors before the assumption of the relevant liabilities and notifications must be made to the holders of the rights assigned thereunder. Furthermore, new regulatory approvals (to the extent applicable and necessary for the business transferred) should be sought, whereas in case of universal succession, all administrative licenses are by law transferred to the absorbing company or the new company. See question 33 regarding the employees of the business transferred and question 6 for regulatory approvals required in case of a target company that is a regulated entity subject to a special regime.

Furthermore, and subject to the applicable thresholder triggered, an anti-trust clearance pursuant to Greek Competition Law should be granted before closing. In particular, according to Greek Competition Law, an undertaking acquiring sole or joint control must notify the Hellenic Competition Commission of the concentration within 30 days from the conclusion of the agreement or the announcement of the bid, the exchange offer or the acquisition of controlling interest in the target, where the following conditions are cumulatively met:

  • the aggregate worldwide turnover of all undertakings concerned is at least €150 million; and
  • the total turnover in the Greek market of each one of at least two of the undertakings concerned exceeds €15 million.
Consents

Are there any legal, regulatory or governmental restrictions on the transfer of shares in a company, a business or assets in your jurisdiction? Do transactions in particular industries require consent from specific regulators or a governmental body? Are transactions commonly subject to any public or national interest considerations?

Prior approval must be obtained to acquire holdings in:

  • credit and financial institutions by the Bank of Greece or, in the case of one of the four systemic Greek banks, by the European Central Bank;
  • insurance companies by the Bank of Greece;
  • investment firms or other entities supervised by the Hellenic Capital Market Commission;
  • gaming companies by the Hellenic Gaming Commission; and
  • certain energy companies by the Regulatory Authority for Energy.

In principle, there are no provisions or restrictions on foreign ownership in Greece. Cross-border mergers between limited liability companies governed by EU law are regulated by Directive 2005/56/EC of the European Parliament and of the Council, which has been transposed into Greek law by virtue of Law 3777/2009.

In view of the absence of relevant special provisions, mergers between a Greek legal entity and an entity governed by the law of a non-EU member state will also be accepted, with the application by analogy of article 45 of Greek Corporate Law on minority shareholders’ right to request that the société anonyme buys their shares. However, article 25(1) of Law 1892/1990 prohibits:

  • any transaction inter vivos (ie, between the living) by which an individual or legal entity of a nationality or registered seat outside the European Union or the European Free Trade Association is granted an in rem or in personam right on real estate in border areas; and
  • any transfer of shares or corporate units or any change of the shareholders or partners of any type of company that owns real estate in such areas.

Finally, certain sectors may have restrictions on foreign ownership (eg, the provisions governing the gas market applied to the privatisation of the Hellenic Gas Transmission System Operator SA as the Greek independent gas transmission operator).

Are any other third-party consents commonly required?

No, unless there is a provision to this effect included in the target company’s articles of association. Such restrictions cannot be included in the articles of association of a listed company.

In the case of corporate transformations, the approval by the general meeting of shareholders of the companies involved is required.

Regulatory filings

Must regulatory filings be made or registration (or other official) fees paid to acquire shares in a company, a business or assets in your jurisdiction?

See question 6. Fees may be paid to certain authorities for the review of the cases brought before them.