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Preliminary agreements

What preliminary agreements are commonly drafted?

Typically, preliminary agreements may include:

  • a confidentiality agreement ensuring the secrecy of commercially or otherwise sensitive information;
  • a non-binding memorandum of understanding with binding confidentiality clauses;
  • an exclusivity agreement by which the target is legally committed to the potential buyer not to deal with competing buyers for a period during which only the potential buyer can conduct due diligence and decide on the acquisition;
  • a framework agreement;
  • a letter of intent; and
  • a share purchase agreement with conditions for closing.

Principal documentation

What documents are required?

The documents typically required include: 

  • a sale and purchase agreement and a share transfer agreement – the only mandatory document in a share sale;
  • a shareholders’ agreement if the buyer will not acquire 100% of the target;
  • an offer document in case of public takeover bids under Law 3461/2006; and
  • in relation to mergers, demergers and, according to the prevailing view, spin-offs a:
    • draft merger agreement, draft demerger agreement or draft spin-off agreement, which is approved by the companies’ general meetings of shareholders; and
    • transformation notarial deed.

Which side normally prepares the first drafts?

Normally, the buyer prepares the first draft of the sale and purchase agreement, unless the parties are subject to competition procedures, in which case the first draft is prepared by the vendor. The vendor usually prepares the first draft of the shareholders’ agreement.

What are the substantive clauses that comprise an acquisition agreement?

The substantive clauses that comprise an acquisition agreement include:

  • a purchase price clause and a clause on the number of shares or the assets to be acquired and transferred;
  • clauses on conditions precedent;
  • representations and warranties clauses;
  • clauses on covenants that will apply between signing and closing;
  • clauses on specific indemnities, if any;
  • a clause on dispute resolution methods; and
  • a governing law clause.

What provisions are made for deal protection?

To date, deal protection is not heavily practiced in Greece. Break-up fees have been agreed in a small number of cases and are enforceable in principle. However, as there is no published case law, their enforceability has not yet been tested. Of course, limitations based on general principles of law (ie, the abusive exercise of rights) will apply. Notably, if a target’s board of directors agrees to such provisions, this may limit the shareholders’ ability to reject a merger proposal or bid.

Further, in order to mitigate the risk of not receiving the necessary approvals for the transaction (eg, approval from the Hellenic Competition Commission or the Hellenic Capital Market Commission), the parties often set the granting of the relevant approvals as conditions precedent for closing.

Closing documentation

What documents are normally executed at signing and closing?

The transfer documents – typically the share transfer agreement – are normally executed at signing and closing. If the shares to be transferred are listed, the stockbroker will receive an order to make the sale/purchase of the shares at the relevant price. In addition, the depositary or custodian of the shares will also receive an order to transfer the shares to the acquirer. If the purchased shares are registered but not listed, an order must be given for the registration of the transfer in the issuer’s book of shares and the share titles must be delivered to the acquirer and properly annotated. 

Are there formalities for the execution of documents by foreign companies?

There are no formalities for the execution of documents by foreign companies under Greek law.

Are digital signatures binding and enforceable?

Pursuant to Regulation (EU) 910/2014 of the European Parliament and of the Council, a qualified electronic signature, namely an advanced electronic signature (ie, an electronic signature which is uniquely linked to the signatory, capable of identifying the signatory, created using means that the signatory can maintain under its sole control and linked to the data signed therewith in such a manner that any subsequent change of the data is detectable) which is based on a qualified certificate and created by a qualified electronic signature creation device has the equivalent legal effect of a handwritten signature. However, this framework is uncommon in practice. Further, in cases where contractual type is not mandatory for the execution of documents, the exchange of PDF documents via email will suffice in order for them to be considered binding and enforceable.

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