Company acquisition in Greece
Purchasing a company that is already operating in the Greek market continues to enjoy growing popularity compared to forming a new company. In addition to tax advantages, the main appeal lies in better securing one’s own investment through a company already established in the market. Acquiring a (majority) stake in an existing company is another option to consider. Such corporate transactions – “mergers & acquisitions” (M&A) – are also well established in Greece. The legal framework depends significantly on the legal form of the company, the particularities of the target company, and the specific subject matter of the transaction.
Share Deal and Asset Deal
In a share deal, shares in a company are transferred; what matters are the company-law provisions of the respective legal form, which already determine the form (notarial or private written) and the disclosure procedure for the transfer. All disclosure procedures today run uniformly through the General Commercial Registry (ΓΕΜΗ).
In an asset deal, individual or all assets of a company are transferred, without the company (the legal entity) itself being acquired. What matters here are the general civil-law provisions, depending on the type of asset concerned (real property, movable property, receivable, right). Liability and tax considerations are of central importance when choosing between a share deal and an asset deal; the risk of unknown existing liabilities of the target company must be examined particularly carefully in a share deal.
FAQ
Answer: The process is usually structured in the following steps:
- Screening (pre-selection of possible target companies);
- Making contact with the target;
- Confidentiality agreement;
- Letter of Intent (LOI);
- Due diligence (legal and financial);
- final contract drafting and price negotiations;
- for larger deals: notification to the Competition Commission;
- signing and handover.
Answer: Due diligence is the careful evaluation of a company. It comprises a legal review (“legal due diligence”) and a financial review (“financial due diligence”) of the target company.
Answer: Due diligence should cover all information relevant to the company, in particular:
- Company data since formation;
- strategic direction, business policy;
- environment and framework conditions;
- financial situation, asset position, cash flow, liquidity, earning power;
- organizational management and technical standards;
- staffing levels;
- legal and tax situation (including the status of myDATA bookkeeping);
- environmental matters and legacy contamination.
Answer: Company purchase agreements are subject to the general civil-law provisions of the Greek Civil Code (Αστικός Κώδικας) as well as the further provisions of the Greek Commercial Code (Εμπορικός Νόμος) and, depending on the transaction structure, the special company-law provisions (including Law 4548/2018 for the AE, Law 3190/1955 for the EPE, and Law 4072/2012 for the IKE).
Answer: In addition to the essentialia negotii (parties, subject matter of the sale, purchase price), the agreement should in particular contain provisions on:
- Warranties, representations, guarantees;
- assumption of rights and obligations under existing contracts;
- exclusions of liability and claims;
- contractual penalties and non-compete clauses;
- unwinding in the event of non-performance.
Answer: In the event of a breach of the purchase agreement obligations, the buyer is entitled to a reduction of the purchase price as well as a claim for remedy or replacement delivery. In the event of non-performance, the buyer may demand performance and damages, or withdraw from the contract and claim damages for non-performance.
Answer: For the EPE, the transfer of shares takes place by way of a notarial purchase agreement. For non-listed AEs, the transfer takes place through the acquisition of shares; bearer shares can be transferred by private written agreement, while registered shares are subject to special formalities. For listed AEs, the purchase of shares takes place through stock exchange trading.
Answer: For acquisitions that create a particularly large company or a dominant market position, Greek antitrust law (Law 3959/2011, since amended, among other things, to implement EU Directive (EU) 2019/1 “ECN+”) must be examined; a notification requirement to the Competition Commission applies in particular where certain turnover thresholds are exceeded (further details in our separate FAQ on competition and antitrust law). For cross-border acquisitions, the European merger control regime (Regulation (EC) No. 139/2004) must additionally be taken into account.