In the now borderless European single market, diverse entrepreneurial opportunities arise—both from the constant expansion of the single market and because of the country-specific characteristics and the differing development status of the individual member states. Today, it is not only the “Global Players”, i.e., the international large corporations, facing the question of foreign expansion, but also medium-sized firms and companies that wish to participate in the advantages of a larger single market.
When planning an investment in Greece, German companies face the choice of either founding a new company or taking over an existing company or participating in one. In addition to the possibility of establishing a new company in Greece, the takeover of an already existing Greek company or participation in it can hold advantages. Such corporate transactions, such as the merger, the takeover of companies, or participation in them, are referred to as “Mergers & Acquisitions”, abbreviated “M & A”.
Note: The article is also available as a PDF download under the title Mergers & Acquisitions in Greece, Company Purchase, -Merger and -Division.
Mergers & Acquisitions in Greece
The worldwide market for M & A transactions has noticeably revived in recent years. This trend has not stopped at Greece, as various recent takeovers have shown. But even for medium-sized companies, the acquisition of other companies or participation in them can contribute to improving their market position and bring tax advantages.
The German entrepreneur who is considering the takeover of a Greek company will be guided, among other things, by the idea that the effective benefit resulting from an acquisition can be higher from the sum of the individual companies than the separately considered benefit from the individual companies. In this case, the aspect of synergy effects will be paramount.
Organic growth through the formation and establishment of a new company abroad through one’s own efforts may take a lot of time until installation and revenue generation. The acquisition of an already existing and well-established company in the market, on the other hand, can lead to immediate market presence and revenue generation or even an immediate inorganic expansion of the existing company structure. Further crucial reasons in favour of the takeover of a Greek company can be the brand of a specific company, the location, immediately available production capacities, etc.
On the other hand, the participation of an investor can achieve new liquidity and thus contribute to improving the market position of an existing company or, in the case of the company sale, e.g., the issue of succession can also be regulated.
Regardless of which alternative the company chooses, it will have to inform itself about the legal framework as well as the social and economic customs in Greece. Another important point in the considerations will then be the cross-border interaction of the Greek (subsidiary) company with the German (parent) company.
Note: Good advice need not be expensive, but missing or false advice can come at a high cost to the company, especially if errors occur already during planning and consultation. Timely consultation by lawyers who specialize in cross-border business is therefore strongly recommended.
However, the constantly converging EU single market is currently opposed by a flood of national law and national legal particularities in the individual countries that has only been partially harmonized so far. While previously only larger corporations and companies had to master the respective regional particularities, the creation of the EU single market now also increasingly confronts small and medium-sized companies with the various legislations and national regulations.
(Status: April 2010. All information is subject to change and without guarantee.)