Private mergers and acquisitions in Austria: overview

Q&A guide to private acquisitions law in Austria.

The Q&A gives a high level overview of key issues including corporate entities and acquisition methods, preliminary agreements, main documents, warranties and indemnities, acquisition financing, signing and closing, tax, employees, pensions, competition and environmental issues.

To compare answers across multiple jurisdictions, visit the Private mergers and acquisitions Country Q&A tool.

This Q&A is part of the global guide to private acquisitions law. For a full list of jurisdictional Q&As visit


Corporate entities and acquisition methods

1. What are the main corporate entities commonly involved in private acquisitions?

An Austrian acquisition vehicle is usually a limited liability company (Gesellschaft mit beschränkter Haftung) (GmbH).

An Austrian target is usually either an Austrian joint stock company (Aktiengesellschaft) (AG) or a GmbH (the legal form of the GmbH is more common, unless the target intends to be listed).

A limited partnership (Kommanditgesellschaft) (KG) with an unlimited partner that is a GmbH (GmbH & Co KG) is another common form of how a target can be set up, although they have become less and less common (which was mainly due to tax reasons). A recent tax reform may increase their popularity for smaller businesses.

2. Are there any restrictions under corporate law on the transfer of shares in a private company? Are there any restrictions on acquisitions by foreign buyers?

Restrictions on share transfer

GmbHs and AGs. The subscription and transfer of (as well as the promise to subscribe or transfer) shares in a GmbH requires a notarial deed. The transfer of title to registered shares in an AG requires handing over of the duly endorsed share certificates or an assignment (Zession) (see Question 24). Share transfers in GmbHs and AGs can be restricted by a consent requirement (Vinkulierung) of the corporation or its shareholders in the articles. Where the consent is refused, it can be substituted by the commercial court on application of the shareholder intending to transfer his shares, provided that:

  • He has fully paid in his capital contribution.

  • The transfer can occur without damaging the company, the shareholders and the creditors of the company.

If substitute consent is awarded by the commercial court, the transfer may still not occur if the corporation finds another purchaser acceptable to the corporation who is willing to purchase the shares at the same terms within one month of the court decision.

In case of GmbHs the articles may also contain rights of first refusal, drag and tag along rights, and so on. A recent Austrian Supreme Court ruling suggests that such rights can also be implemented in the articles of an AG if the AG is closely held.

Partnerships. The issue or transfer of partnership interests requires the consent of all other partners under the default rules. This requirement is often modified or waived in the partnership agreement.

Foreign ownership restrictions

Regulated industries. For both foreign and domestic acquirers in regulated industry sectors (for example, banking, insurance, utilities, gambling, telecoms or aviation), the acquisition of a qualified or a controlling interest is typically subject to advance notification to, or approval of, the competent regulatory authority. Sanctions for failure to notify or obtain approval in advance differ and range from monetary penalties, to ordering a suspension of voting rights, or a partial or total shut down.

Real estate. The acquisition of ownership and certain lease interests in real estate by non-EEA nationals, or the acquisition of control over companies owning such interests, is subject to notification or approval by the local Real Estate Transfer Commission (Grundverkehrsbehörde). What interests are covered and whether notification or approval is required varies from state (Bundesland) to state. Where the real estate is used for commercial rather than residential purposes approvals are usually granted.

Foreign Trade Act. The acquisition of an interest of 25% or more or a controlling interest in an Austrian business by a foreign investor (that is, an investor domiciled outside of the EEA and Switzerland) is subject to advance approval by the Austrian Minister of Economic Affairs under the Foreign Trade Act (Außenwirtschaftsgesetz) where that business is involved in:

  • Inner and outer security (Innere und Äußere Sicherheit), for example, defence and security services.

  • Public order and security, including public and emergency services (öffentliche Ordnung und Sicherheit einschließlich der Daseins-und Krisenvorsorge), for example, defence, security services, hospitals, emergency and rescue services, energy and water supply, telecommunications, traffic or universities.

Within one month of submitting the application, the Minister of Economic Affairs must either approve the transaction or initiate phase two investigations. If phase two investigations are initiated, the decision is due within two months following the application. If no decision is adopted within those time limits, the transaction is deemed approved by law. The application for approval must be filed prior to signing. Transactions subject to approval cannot be completed pending approval. Failure to obtain approval is subject to imprisonment and criminal penalties.

While the acquisition of an interest of 25% or more or a controlling interest in an Austrian business by an investor that is domiciled in the EEA or Switzerland is not subject to advance approval by the Austrian Minister of Economic Affairs under the Foreign Trade Act, the latter can initiate ex officio investigations at any time (that is, there is no time limit to start that procedure). These investigations can be brought, for example, to counter abusive structures.

3. What are the most common ways to acquire a private company? What are the main advantages and disadvantages of a share purchase (as opposed to an asset purchase)?

Share purchases are the most common way to acquire a private company. This is due to the simplicity of share purchases compared to other acquisition structures.

Share purchases: advantages/asset purchases: disadvantages

The following apply:

  • In case of a share purchase the purchaser acquires an indirect participation in the business. The business itself, however, remains with the same legal entity. In case of an asset purchase the business (including all of the assets, permits and legal relationships related to it) must be identified and transferred from one entity to another, which usually causes additional complexity and expense. For example:

    • the transfer of title to tangible assets generally requires delivery or deemed delivery of the asset (section 426, Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch)) (ABGB);

    • the transfer of title to real property requires an agreement between the seller and purchaser, and registration of the transfer in the land register; and

    • asset permits usually transfer together with the asset, but personal permits generally do not transfer.

Specific transfer provisions exist for business-related (non-personal) legal relationships (Rechtsverhältnisse) and security interests securing business-related liabilities, labour relationships (section 3, Act on the Amendment of Employment Contracts (Arbeitsvertragsrechts-Anpassungsgesetz)) (AVRAG), tenancy relations (section 12a., Austrian Tenancy Act (Mietrechtgesetz)) (MRG), insurances (sections 13 and 69, Austrian Insurance Supervisory Act (Versicherungsaufsichtsgesetz)) (VAG), patent licences (section 38, Austrian Patent Act (Patentgesetz)) (PatG), trade marks and trade mark licences (section 11, Austrian Trade Mark Act (Markenschutzgesetz)) (MarkSchG) and copyrights (section 28, Austrian Copyrights Act (Urheberrechtsgesetz)) (UrhG).

Asset purchases implemented by way of a merger or spin-off structure (where the seller receives a share in the purchasing entity in a first step and subsequently sells that share to the purchaser for cash) benefit from universal succession, which replaces the need for identifying the relevant parts of the business and of transferring each asset individually (all assets and liabilities are transferred here by operation of law).

  • Employee information/consultation obligations are of a lesser concern in case of a share deal (see Question 31).

  • For both share and asset purchases real estate transfer tax can be triggered if the target directly owns real estate. However, appropriate structuring of a share deal can avoid the triggering of real estate transfer tax (see Questions 25 and 26).

  • At the shareholder level, capital gains taxation will depend on whether the sellers are domestic or foreign resident (see Question 27).

  • The share purchase transaction generally does not have any impact on the tax position of the target, with a few exceptions, such as that net loss carry-forwards may not be available anymore, and the purchase may also lead to the drop-out or even collapse of a tax group under section 9 of the Austrian Corporate Income Tax Act (Unternehmensgruppe) and thereby trigger retroactive taxation (see Question 30).

  • Share deals enjoy an exemption from VAT, whereas an asset deal is subject to VAT (see Question 25). This will, however, usually not be an issue, unless the assets relate to a business that is not entitled to deduct input VAT (for example, a banking business). In most cases VAT will therefore not be a decisive factor in favour of a share deal as opposed to an asset deal.

  • If the seller is a corporation, both an asset deal and a share deal trigger corporate income tax at the rate of 25%. If the seller, however, is an individual, the asset deal will usually trigger taxation of up to 50% (as opposed to 43.75% resulting from a 25% corporate income tax and another 25% income tax when distributed to the individual shareholder, which as of 2016 will increase to a total tax burden of 45.625% due to an increase of dividend withholding tax to 27.5%) (see Question 27).

Share purchases: disadvantages/asset purchases: advantages

Asset purchases have the following advantages:

  • The main advantage of an asset purchase is that the purchaser can choose if he wishes to acquire all or only parts of the business. Most of the specific transfer provisions described above (business-related legal relationships, labour relationships and so on) however, require a purchase of all or at least a self-sustainable part of the business.

  • The asset purchaser does not have to concern himself with rights in the shares of the target (such as conversion or pre-emption rights) or unknown shareholders.

  • The asset purchaser can concern himself less with liabilities of the target than on share deals. However, the purchaser may be subject to certain liabilities and some may even transfer to the purchaser together with the business (see Question 6).

  • On a share purchase, the purchaser can become liable for unpaid contributions (Stammeinlagen) towards the target where another shareholder has failed to pay those contributions and management cannot recover the outstanding contributions from the defaulting shareholder's predecessors or by auctioning off the share.

  • Any security granted to financing banks to finance the acquisition will not be affected by limitations under capital maintenance (section 82, Limited Liability Company Act 1906 (GmbH-Gesetz) (GmbHG) or section 52, Stock Corporation Act 1965(Aktiengesetz) (AktG)) or financial assistance rules (section 66a, AktG).

  • From a tax perspective the main benefit of an asset deal is the step-up in the tax bases of the assets acquired. It may also be easier to offset the interest expenses from the financing in an asset deal, although a similar effect can be achieved when acting through a tax group in case of a share deal.

  • For share acquisitions made until 28 February 2014, provided the target was Austrian (although based on EC law, recent case law provides that EU-resident targets should have qualified as well) and had an active trade or business, a goodwill amortisation (up to 50% of the purchase price, pro-rated over a period of 15 years) was available under certain conditions (if a tax group between the purchaser and the target was set up, which also enabled the purchaser to deduct interest expenses for the acquisition from the operational profit of the target). With that option not being available anymore, buyers may prefer an asset deal from a tax perspective, to ensure a step up in the basis of the acquired assets.

4. Are sales of companies by auction common? Briefly outline the procedure and regulations that apply.

Auctions are rather common. In a typical process the seller will require bidders to submit:

  • An indicative bid on the basis of an information package.

  • A binding bid (usually with a mark-up of the sale and purchase agreement prepared by the seller) based on the information disclosed in phase 1 due diligence.

On the basis of the binding bids, the seller will then engage in negotiations with two to three bidders and may grant them access to the phase 2 due diligence material and red files (if any).

There is no specific legislation for auction processes (that is, they are usually subject to rules set out by the seller and accepted by the bidders), however, when a state-controlled seller is involved, the process should be transparent and non-discriminatory to provide for a proper defence against any argument that the seller effectively granted a subsidy by selling to the prevailing bidder and thereby violated EU state aid regulations. This is particularly an issue in cases in which the seller does not pick the highest bid.


Preliminary agreements

5. What preliminary agreements are commonly made between the buyer and the seller before contract?

Letters of intent

Letters of intent (LOIs) are sometimes also referred to as heads of terms, term sheets or memorandums of understanding. Typical elements of LOIs include the following:

  • Description of proposed transaction.

  • Indicative price or pricing formula (and explanation of the assumptions on which it was based and whether or not it is subject to adjustment, for example, by reference to certain financial parameters in the closing accounts).

  • Conditions, for example:

    • satisfactory due diligence;

    • board approval;

    • regulatory and third party approvals;

    • satisfactory definitive agreements;

    • no material adverse change since the date of the letter;

    • retention of key employees;

    • completion of pre-closing carve-outs;

    • retention of material business and finance contracts.

  • Proposed timeline.

  • Proposed funding of the transaction.

  • Exclusivity.

  • Break fee.

  • Language.

  • Termination date (and surviving obligations, for example, confidentiality).

  • Costs.

  • Choice of law and jurisdiction.

With the exception of the provisions on costs (including break fee, if any), exclusivity, language, choice of law and jurisdiction, LOIs are not intended to be legally binding and should clearly state this. Unless expressly excluded, by law a LOI creates pre-contractual duties to progress negotiations in good faith. The exact scope of such duties is debated, but it is relatively clear that they imply an obligation not to break off negotiations without cause. Damages recoverable on breach are limited to the so-called "negative interest" (negatives Interesse) (that is, damages putting the other party in the position it would have been in had negotiations not taken place).

LOIs are not strictly necessary for every transaction. They do, however, make sense for more complicated transactions or to ensure that the parties have a mutual understanding of the proposed transaction before entering into detailed negotiations.

Exclusivity agreements

Exclusivity agreements (also known as lock-out, shut-out or no-shop agreements) can be used to give a prospective purchaser exclusive negotiating rights, usually for a fixed period. The lock-out can be a stand-alone agreement or form part of a LOI (in which case the lock-out provisions must be stated to be legally binding) or non-disclosure agreement (see below, Non-disclosure agreements).

Lock-outs among the transacting parties are generally valid. In case of breach the affected party can seek specific performance or claim damages for non-performance.

Often lock-outs are coupled with a break-fee or liquidated damages clause. This is mainly because damages are difficult to quantify in such situations. Both clauses are subject to mandatory judicial mitigation upon application of either party.

Non-disclosure agreements

Non-disclosure or confidentiality agreements or letters (NDAs) are usually signed at the very beginning of a transaction. Sometimes, non-disclosure or confidentiality undertakings form part of a LOI (in which case they must be expressed to be legally binding). More often, however, they are set out in one or more separate documents.

A NDA may cover the discussions among the transacting parties and/or the information made available by a shareholder or target company to a prospective purchaser. Whenever information about a target company is involved, Austrian courts require management of the disclosing party to balance the interest of the target company to keep proprietary information confidential against the need of a selling shareholder to disclose such proprietary information to prospective purchasers to facilitate a sale when determining if, at what stage and under what circumstances confidential and/or proprietary information may be disclosed. For this assessment the disclosing party will need to take into account, among other things:

  • The sensitivity of the information to be disclosed.

  • The likelihood that the transaction fails.

  • What use the particular bidder could have from having obtained the information.

  • What remedies would be available if the bidder made use of such information under the NDA.

In theory an affected party could seek specific performance on the basis of a NDA. In practice that is rarely considered. Because damages are difficult to quantify, a liquidated damages clause is recommended (see above, Exclusivity agreements), but not a standard. In addition, the NDA should provide for the target company and its shareholders to be beneficiaries. Some scholars have argued that a liquidated damages clause as well as the third party beneficiary clause must be included for management to satisfy its duties of care.


Asset sales

6. Are any assets or liabilities automatically transferred in an asset sale that cannot be excluded from the purchase?

In an asset sale business-related (non-personal) legal relationships (Rechtsverhältnisse) and security interests securing business-related liabilities transfer from the seller to the purchaser (section 38, Business Code (Unternehmensgesetzbuch) (UGB)) (see Question 3, Share purchases: advantages/asset purchases: disadvantages). Contractors and issuers of security interests securing business-related liabilities must be informed of, and can object to, the transfer of their contractual relationship (or security interest) within three months of notice. The transfer of business-related (non-personal) obligatory relationships can be excluded by private agreement, however towards third parties the purchaser is nevertheless liable unless the agreement on the exclusion has been:

  • Registered with the companies register.

  • Made public.

  • Communicated to the party seeking to claim against the purchaser.

The purchaser's liability for the following cannot be excluded:

  • Accrued payment liabilities (Geldschulden) pursuant to section 1409 of the ABGB which the purchaser knew of or should have known of; the liability of the purchaser is limited to the net asset value of the business or assets acquired (Wert des übernommenen Vermögens).

  • Outstanding taxes (for example, VAT, wage taxes, income tax from capital income (KESt), and withholding taxes under section 99 of the Individual Income Tax Act (Einkommensteuergesetz) (EStG) pursuant to section 14 of the Austrian Federal Fiscal Code (Bundesabgabenordnung) (BAO)) which the purchaser knew of or should have known of. Liability of the purchaser is limited to the value of the assets and rights transferred (liabilities are not to be deducted).

  • Outstanding social security contributions pursuant to section 67 para 4 of the Austrian General Social Security Act (Allgemeines Sozialversicherungs Gesetz) (AVSG) for the 12-month period prior to the transfer. Where an inquiry is made with the relevant social security carrier, the purchaser's liability is limited to the amount stated in the response (this inquiry is therefore recommended).

  • Liabilities accrued under employment relationships (including pension commitments) pursuant to section 6 para 1 of the AVRAG; liability is subject to the same limitations as liability under section 1409 of the ABGB (see above).

Where an asset sale is structured as a spin-off (Spaltung zur Aufnahme) all (non-personal) legal relationships (with a few exceptions relating to non-transferable positions) transfer, together with all rights and liabilities accrued up to the date of transfer, to the purchaser on registration of the spin-off in the companies register (see Question 3, Share purchases: advantages/asset purchases: disadvantages).

7. Do creditors have to be notified or their consent obtained to the transfer in an asset sale?

No consent or notification is required. However, to trigger the three-month objection period under section 38 of the UGB, contractors and issuers of security interests securing business-related liabilities must be notified and specifically informed of their right to object (see Question 6), failing which the objection right is exercisable until the 30th anniversary of the date of transfer.


Share sales

8. What common conditions precedent are typically included in a share sale agreement?

Conditions precedent may include:

  • Governmental approvals (including competition and regulatory approvals).

  • No material adverse change (MAC).

  • No breach of covenant or warranty.

  • Third party consents (for example, under change of control provisions).

  • Completion of reorganisation.

  • Completion of remedial action (for example, where defects have been identified in the course of the due diligence which need to be remedied prior to closing).

The share purchase agreement will typically specify:

  • The obligations of the parties with respect to the conditions precedent (for example, the purchaser is responsible for the preparation of the filing to the competition authority while the seller must provide the purchaser with all necessary information).

  • If and who may waive a condition precedent.

  • A certain cut-off date by which the conditions precedent must be satisfied and the consequences if a condition precedent is not satisfied by that date (typically a right to proceed with closing, to defer closing to a later date or to terminate the share sale agreement).


Seller's title and liability

9. Are there any terms implied by law as to the seller's title to the shares in a share sale? Is any specific wording necessary and do buyers normally impose a higher standard than is implied by law?

Absent any agreement to the contrary in the purchase agreement, a seller must transfer the shares free of defects affecting the legal status as a shareholder (Gesellschafterstellung) conferred by the shares sold. This clearly includes a defect in title to, or encumbrances of, the shares (or rights conferred by the shares), but it is uncertain what else it would cover. For that reason, the acquisition agreement will usually contain representations and warranties on the:

  • Share capital (Stammkapital).

  • Issue of the shares.

  • Payment of share contributions (Stammeinlage).

  • The absence of rights diluting or otherwise affecting the rights conferred by the shares (for example, options, warrants, rights to a share in the profit or results or control agreements).

See Question 14.

10. Can a seller and its advisers be liable for pre-contractual misrepresentation, misleading statements or similar matters?


A seller can be held liable for pre-contractual misrepresentation under two legal principles:

  • Misrepresentation under warranty law (Gewährleistungsrecht). This can apply where the purchaser can establish that in light of the circumstances it was entitled to believe that the seller wanted to represent (rather than just inform the purchaser on a no liability basis of) a particular matter.

  • Breach of pre-contractual duties of care (culpa in contrahendo). This can apply where the seller knew or should have known (the gross negligence standard) that the relevant representation is untrue.

In contrast, a seller is generally not liable for failure to inform the purchaser of potential defects. However, where the seller is aware that a defect exists or is very likely and the defect is material, Austrian courts have ruled that the seller can become liable.


A seller's adviser can become liable for pre-contractual misrepresentation under general concepts of damages law (Schadenersatzrecht). In addition, the seller can become liable for its adviser's misrepresentation under concepts of vicarious liability.


Main documents

11. What are the main documents in an acquisition and who generally prepares the first draft?

The main acquisition documents are the:

  • Share purchase agreement or asset purchase agreement (the first draft is generally prepared by the purchaser except in case of an auction, where it is the seller) (see Question 12).

  • Disclosure letter (if any) together with attachments or individual carve out schedules qualifying warranties (the first draft is generally prepared by the seller).

  • Transitional services agreement (if any) (the first draft generally provided by the seller).

  • Warranty insurance policy (if any) (depending on the insured; generally provided by the seller).


Acquisition agreements

12. What are the main substantive clauses in an acquisition agreement?

Share purchase agreement

The key substantive clauses in a share purchase agreement are:

  • Definitions (often in an annex to the agreement).

  • Agreement to sell and purchase shares.

  • Consideration (including purchase price adjustment or leakage protection).

  • Closing (including conditions precedent and closing mechanics).

  • Representations and warranties (see Question 14).

  • Remedies (including limitations) (see Question 16, Remedies).

  • Tax indemnity.

  • Specific indemnities (addressing specific due diligence findings).

  • Further covenants, such as

    • de-branding;

    • migration;

    • transitional services;

    • settlement of group financing;

    • release of group security interests and guarantees;

    • transfer of records;

    • non-compete and non-solicit;

    • confidentiality and announcement.

  • Miscellaneous provisions (including taxes, costs, amendments, notices, governing law and jurisdiction/arbitration).

Asset purchase agreement

The key substantive clauses in an asset purchase agreement are:

  • Definitions (often in an annex to the agreement).

  • Agreement to sell and purchase target business, including:

    • description of target business;

    • excluded assets or parts of the business;

    • dealing with assets acquired and disposed of in the period to closing.

  • Dealing with liabilities.

  • Transfer of contracts.

  • Transfer of IP rights and know how.

  • Transfer of employees.

  • Consideration (including purchase price adjustment or leakage protection, purchase price allocation to assets and VAT treatment).

  • Closing (including conditions precedent and closing mechanics).

  • Representations and warranties (see Question 14).

  • Remedies (including limitations) (see Question 16, Remedies).

  • Tax indemnity.

  • Specific indemnities (addressing specific due diligence findings).

  • Further covenants, including:

    • de-branding;

    • migration;

    • transitional services;

    • registrations (that is, the obligation to ensure all necessary registrations);

    • transfer of records;

    • non-compete and non-solicit;

    • confidentiality and announcement.

  • Miscellaneous provisions (including taxes, costs, amendments, notices, governing law and jurisdiction/arbitration).

13. Can a share purchase agreement provide for a foreign governing law? If so, are there any provisions of national law that would still automatically apply?

A share purchase agreement may provide for foreign governing law. Austrian courts would have to uphold such choice of law, except that they would have to apply:

  • All provisions of mandatory Austrian law, where the case has no cross-border element.

  • Overriding mandatory provisions of Austrian law (Eingriffsnormen) within the meaning of Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I), which are either identified as such, or where there is a clear identifiable intention (Geltungswille) that for social and economic policy reasons those provisions shall be applied irrespective of the chosen law, where the case has no cross-border element. This intention can apply, for example, to certain provisions of corporate law, employment law, foreign trade, competition law or consumer protection law.

In addition, Austrian law applies to the formalities of the transfer of shares (for example, the transfer of shares in a GmbH requires an Austrian notarial deed).


Warranties and indemnities

14. Are seller warranties/indemnities typically included in acquisition agreements and what main areas do they cover?

It is very common to include a comprehensive set of warranties (Gewährleistungen) or guarantees (Garantien) in acquisition agreements and to qualify them, among others, by knowledge and matters that have been disclosed (in a certain manner) or are deemed disclosed. A typical set of warranties/guarantees will address the following areas:

  • Organisation and good standing.

  • Enforceability and authority, and no conflict.

  • Capitalisation of the company and subsidiaries.

  • Required consents.

  • Financial statements.

  • Accounts receivables.

  • Inventories.

  • No undisclosed liabilities.

  • Books and records.

  • Changes since last accounts date.

  • Taxes.

  • Contracts.

  • Customers and suppliers.

  • Related party transactions.

  • Real and personal property.

  • Insurance.

  • Litigation.

  • Employees.

  • Employee benefits.

  • Compliance with legal requirements, and governmental authorisations.

  • Environmental matters.

  • Intellectual property.

  • Information technology.

  • Product liability.

  • Subsidies.

  • Brokers and finders.

  • Disclosure.

Indemnities, on the other hand, are usually not qualified. Indemnities for pre-closing taxes, contamination and environmental compliance (where relevant) have become increasingly common. Other indemnities may address specific due diligence findings.

15. What are the main limitations on warranties?

Limitations on warranties

Common limitations on warranties include:

  • Time limitations for bringing claims.

  • Financial limits, including:

    • a cap on the total liability (where there are multiple sellers, each may seek to limit its liability pro rata);

    • a minimum aggregate claims threshold (basket); and

    • exclusion of de minimis claims.

  • Limitation to direct loss (as opposed to indirect and consequential loss).

  • Exclusion of claims to the extent caused by:

    • agreed matters;

    • acts of purchaser (outside of the ordinary course of business);

    • change of law or interpretation of law;

    • change of tax or accounting policies.

  • No liability for contingent liabilities.

  • No liability concerning matters the purchaser knew or should have known.

  • No liability for mere timing differences.

  • Obligation to mitigate loss.

  • No double recovery under warranties, indemnities and insurance policies.

  • A conduct of claims provision.

Qualifying warranties by disclosure

Warranties (Gewährleistungen) and guarantees (Garantien) are usually qualified by matters that have been disclosed (in a certain manner) or are deemed disclosed by operation of the provisions of the acquisition agreement or the disclosure letter (for example, information which can be obtained from publicly accessible registers).

The seller will always push for general disclosure, which means that everything disclosed to the purchaser and its advisers at whatever occasion qualifies all warranties (including the material in the data room, information exchanged in management meetings, informal telephone calls, and so on). The purchaser will push for specific disclosure against each warranty and to introduce a threshold requiring that a matter must be "fully and fairly" disclosed. It is doubtful if a purchaser can rely on a disclosure threshold, and bring a claim for breach of warranty where he had actual knowledge of the matter giving rise to the claim.

16. What are the remedies for breach of a warranty? What are the time limits for bringing claims under warranties?


The primary remedy for breach of warranty (Gewährleistung) under the ABGB is a claim to remedy the defect. Only where the defect is not capable of remedy or where remedying the defect would be a disproportionate effort for the seller, the purchaser may claim for reduction of the purchase price and, in case of material defects, to rescind (Wandlung) the agreement. This also applies where:

  • The seller refuses to remedy the defect.

  • The seller does not remedy the defect within a reasonable time.

  • Allowing the seller to remedy the defect would mean material inconvenience to, or would be unreasonable for, the purchaser for reasons associated to the seller.

In addition, in circumstances where the purchaser can claim for a reduction of purchase price and can establish fault of the seller, the purchaser can also claim for damages (Schadenersatz). The remedy for breach of guarantee (Garantie) under the ABGB is a claim for damages independent of fault (Verschulden) of the seller.

In practice remedies are by contract, typically limited to a claim for monetary compensation. Where a defect is capable of remedy, the right of the seller to remedy may be accepted by the purchaser that is usually subject to similar restrictions to those set out under law. The agreement will generally provide for remedies independent from those available under the law and exclude the latter to the furthest extent possible.

Time limits for claims under warranties

Under statute, claims for breach of warranty (Gewährleistung) must be brought within two years from the date of completion, if they relate to the (underlying) business, and two years from the date of knowledge, in case of legal defects (except for claims for damages). Claims for damages (whether based on warranty or a guarantee (Garantie)) generally must be brought within three years from the date of knowledge of the matter that gives rise to the claim. In practice, limitation periods are a matter of negotiation. Title and capacity warranties usually have a minimum limitation period of ten years, business warranties between 12 and 24 months, tax warranties typically seven years and environmental warranties five to ten years.


Consideration and acquisition financing

17. What forms of consideration are commonly offered in a share sale?

Forms of consideration

The most common form of consideration in a share sale is cash. Sometimes shares of the purchaser, the holding or another group company of the purchaser are offered.

Factors in choice of consideration

What consideration is accepted is primarily a matter for commercial discussion.

18. If a buyer listed in your jurisdiction raises cash to fund an acquisition by an issue of shares, how is the issue typically structured? What consents and regulatory approvals are likely to be required?


An issue is typically structured as a rights offering underwritten by institutions.

Consents and approvals

A purchaser whose shares are listed on a regulated market in Austria (that is, a stock corporation) can issue shares through a capital increase made by resolution at the shareholders' assembly. In addition, where the shareholders' assembly has previously granted authority to the management and supervisory board to increase the share capital and amended the articles of association of the stock corporation accordingly (so-called authorised capital (genehmigtes Kapital)), the management and supervisory board can implement the issue based on, and subject to the limitations provided for in the authorisation in the articles of association.

Existing shareholders have pro-rata subscription rights, which can be excluded by resolution of the general meeting or, if the shareholders' resolution on the authorised capital so permits, by resolutions of the managing board and the supervisory board. The capital increase becomes effective on registration in the companies register.

A shareholders' resolution approving a capital increase or the installation of an authorised capital generally requires a majority of 75% of the votes cast.

Requirements for a prospectus

Where new shares are publicly offered for subscription (including through underwriters), the issuer must publish a prospectus containing certain information on the issuer. A prospectus for shares in a stock corporation must be approved by the Austrian Financial Market Authority (FMA) before it can be published. An offer can only be started after publication of the prospectus. If the issuer is already listed, or applies for a listing of its shares, the prospectus will also serve as a listing prospectus.

For private placements (mainly placements only to qualified investors or with a minimum investment amount of EUR100,000 or to no more than 150 investors), no prospectus is required (section 3, Austrian Capital Markets Act (Kapitalmarktgesetz) (KMG)).

19. Can a company give financial assistance to a potential buyer of shares in that company?


Sections 82 of the GmbHG and 52 of the AktG generally prohibit the return of equity (Verbot der Einlagenrückgewähr) to shareholders. (This includes any up-stream or side-stream transactions, for example, transactions with the parent company of the shareholder or another subsidiary of the shareholder, that is, a sister company of the Austrian company. Future references to the shareholder in this context also include such up-stream or side-stream transactions.) Based on this principle Austrian courts have established that a company must not make any payments to its shareholders, except:

  • For the distributable balance sheet profit.

  • In a formal reduction of the stated share capital (Kapitalherabsetzung).

  • For the surplus following liquidation.

The prohibition on return of equity covers payments and other transactions benefiting a shareholder where no adequate arms' length consideration is received in return. To the extent a transaction qualifies as a prohibited return on equity, it is null and void between the shareholder and the subsidiary (and any involved third party if it knew or should have known of the violation). It may result in liability for damages. Most of the above principles are also applied by the Austrian courts by analogy to limited partnerships with a GmbH or AG as unlimited partner (that is, GmbH & Co KG and AG & Co KG).

In addition, section 66a of the AktG prohibits a target company from financing, or providing assistance in the financing of, the acquisition of its own shares or the shares of its parent company (irrespective of whether or not the transaction constitutes a return of capital). It is debated whether section 66a of the AktG should be applied by analogy to GmbHs. Transactions violating section 66a of the AktG are valid but can result in liability for damages.


With regard to the prohibition on return of equity (Verbot der Einlagenrückgewähr) Austrian courts have developed case law suggesting that a subsidiary may lend to a shareholder, or guarantee, or provide a security interest for a shareholder's loan if:

  • It receives adequate consideration in return.

  • It has determined (with due care) that the shareholder is unlikely to default on its payment obligations and that even if the shareholder defaults, such default would not put the subsidiary at risk.

There are no exceptions to section 66a of the AktG. Given that a violation does not render the transaction void, section 66a of the AktG is usually of lesser concern.


Signing and closing

20. What documents are commonly produced and executed at signing and closing meetings in a private company share sale?


Documents commonly produced and executed at signing meetings include:

  • Asset or share purchase agreement (see Question 14).

  • Disclosure letter, if any (in which the seller makes disclosures qualifying the warranties or guarantees (see Question 11).

  • Escrow agreement, if any (where part of the purchase price is paid into escrow).

  • Other transaction documents (for example, shareholders' agreement, transitional service agreement, rebranding agreement, and so on, which can either be in agreed form and executed at closing or executed at signing and include a closing condition).

  • Evidence that persons signing on behalf of the parties have capacity to do so and that all necessary corporate and other action on behalf of each party was taken.

  • Evidence that the purchaser will have sufficient funds (for example, purchaser's parent guarantee, equity commitment letter (where private equity funds the equity portion of the purchase price) and definitive finance documents (where banks fund the debt portion of the purchase price in a leveraged buyout transaction)).

  • Warranty (and indemnity) insurance policy, if any.


Documents commonly produced and executed at closing meetings include:

  • Documentation (and actions) required to transfer title to shares or assets.

  • Documentation required to transfer, redeem or refinance shareholder loans.

  • Documentation on prepayment and release of existing third party financing.

  • Bring down certificates (where agreed) of officers of the target group.

  • Evidence that (material) third party consents have been obtained.

  • Resignations of members of the management and supervisory board.

  • Execution of any other transaction documents in "agreed form" (see above).

21. Do different types of document have different legal formalities? What are the formalities for the execution of documents by companies incorporated in your jurisdiction?

The validity of a contract is not subject to compliance with any particular form, unless a particular form is required by law. Some contracts are only valid if performed (Realverträge). Other contracts may require a particular form, for example they must be made:

  • In writing.

  • Before a public notary (either requiring notarised signatures or the form of a notarial deed), a court or witnesses.

Where the law requires that a contract is made in a particular form, an amendment generally must be in the same form and a power of attorney to conclude that contract must comply with that form requirement as well. The above principles equally apply to physical persons and companies.

In addition, procedural rules governing filings before courts and other governmental authorities often require a particular form (for example, documents submitted to the companies register, filings for clearance of the Federal Competition Authority (Bundeswettbewerbsbehörde) (FCA)).

22. What are the formalities for the execution of documents by foreign companies?

The same requirements apply for domestic and foreign companies (see Question 21). In the context of powers of attorney, to the extent that notarisation of the signatures is required, often a super-legalisation will be required as well. Further, proof of power of representation may also be a concern in relation to foreign companies; in some cases a super-legalised companies register excerpt is sufficient, whereas in other cases it is necessary to analyse the corporate documents.

23. Are digital signatures binding and enforceable as evidence of execution?

Pursuant to the Digital Signatures Act (Signaturgesetz) (SigG) a qualified electronic signature which is based on an authenticated certificate issued by a provider of signature and certification services (Zertifizierungsdiensteanbieter (ZDA)) within the meaning of the SigG is deemed equivalent to a handwritten signature, subject to statutory exceptions and contractual agreements to the contrary.

24. What formalities are required to transfer title to shares in a private limited company?

The transfer of, and every promise to transfer, title to shares in a GmbH requires a purchase or other transfer agreement drawn up in the form of an Austrian (or German; for other jurisdictions a case-by-case analysis is required) notarial deed. The transfer of title to registered shares in an AG requires handing over of the duly endorsed share certificates. Where no share certificates are issued, an assignment agreement is sufficient. To be recognised as a shareholder and be able to exercise shareholder rights, registration in the share ledger (Aktienbuch) (which is effected by the management board on application of the purchaser) is required. Bearer shares can only be issued where the issuer is listed (or is to be listed pursuant to the articles of association). The transfer of title to bearer shares requires matching purchase and sell orders and book order entry.

In addition, where under the articles of association the transfer of shares in a GmbH or of registered shares in an AG requires the approval of the company (represented by the management or the supervisory board) or the shareholders, a transfer will only be valid with the prior approval of the company or the shareholders (Vinkulinerung). For the process where approval is not granted, see Question 2, Restrictions on share transfer.

This also applies to other transfer restrictions provided for in the articles of association of a GmbH. The prevailing view was that such transfer restrictions cannot be implemented in the articles of association of an AG; a recent supreme court ruling, however, suggests that it may be possible for closely held joint stock corporations. In contrast, transfer restrictions contained in the shareholders' agreement or other private agreements generally do not render a transfer ineffective.



25. What transfer taxes are payable on a share sale and an asset sale? What are the applicable rates?

Share sale

VAT. The transfer of shares is exempt from VAT.

Real estate transfer tax. Under current Austrian tax law, real estate transfer tax is triggered if all of the shares of a company that directly holds Austrian real estate are consolidated in the hands of one shareholder (Anteilsvereinigung), which could be the case by purchasing 100% of the shares or by purchasing a smaller stake that together with shares already held by the purchaser add up to 100%. According to a recent tax reform (applicable for transactions effected after 31 December 2015), this threshold is reduced to 95%. Furthermore, the tax reform also adds a new taxable event: if within a period of five years, 95% or more of the partnership interests of a partnership that directly holds real estate are transferred, this triggers real estate transfer tax (under the scope of this new rule, this can include several transactions with different purchasers). In each case the real estate transfer tax amounts to 0.5% of the fair market value of the real estate. The changed law now states that shares held by trustees are to be attributed to the trustor for purposes of calculating the 95% threshold. If Austrian real estate is transferred by way of a reorganisation (Umgründung) that qualifies for the benefits of the Reorganisation Tax Act (Umgründungssteuergesetz) (UmgrStG), the real estate transfer tax will likewise be 0.5% of the fair market value of the real estate.

Asset sale

VAT. The sale of assets is generally subject to VAT, typically at a rate of 20%. Exceptions apply, among others, with respect to shares (see above, Share sale) and real estate. The sale of a business or a qualified part of a business as a going concern is treated as the sale of the underlying individual assets. Subject to receipt of proper VAT invoices, the purchaser can deduct input VAT if he is an entrepreneur within the meaning of the Austrian Value Added Tax Act (Umsatzsteuergesetz) (UStG) acquiring the assets for his business and not for private purposes. In practice it is also common to "roll-over" the VAT liability to the purchaser (Überrechnung), which may then offset such VAT liability with his input VAT claim.

Real estate transfer tax. If real estate is transferred alone or as part of a business, real estate transfer tax is payable at a rate of 3.5% of the purchase price attributable to the real estate, at least on the value of the real estate. In the absence of consideration special rules determine the relevant tax base. In addition, the land register charges a registration duty in the amount of 1.1% of the purchase price attributable to the real estate for registering a transfer of real estate. If Austrian real estate is transferred by way of a reorganisation (Umgründung) that qualifies for the benefits of the UmgrStG, the real estate transfer tax will likewise be 0.5% of the fair market value of the real estate.

Stamp duties. The transfer of rights and obligations may trigger stamp duties for assignments (Zessionen) (see Question 29).

26. What are the main transfer tax exemptions and reliefs in a share sale and an asset sale? Are there any common ways used to mitigate tax liability?

Share sale

Reorganisation Tax Act. Certain share purchases can be structured as a merger, a spin-off or a contribution in kind, in which case the transaction may be eligible for the benefits available under the Reorganisation Tax Act (UmgrStG), in particular a roll-over treatment. If the transaction qualifies under the UmgrStG, transfer taxes can also under certain conditions be avoided or reduced (see Question 25, Share sale). These conditions depend on the type of reorganisation. For domestic reorganisations, they include, among others:

  • A proper documentation including the required balance sheets.

  • Timely filing of the reorganisation (in some cases with the companies register, in others with the competent tax office).

  • In case of a contribution in kind or a spin-off also the transfer of qualified assets (for example a business unit or a qualified stake of shares representing at least 25% of the share capital or ensuring together with shares already held by the acquiring company a majority in the share capital of the company that shares of which are being transferred).

  • Minimum holding periods for certain items.

  • Various other formal requirements.

For cross-border or foreign reorganisations further requirements apply, for example, the comparability of the foreign corporation and of the foreign reorganisation.

Real estate transfer tax. Until a recent tax reform, real estate transfer tax could be avoided by transferring a minority interest to a third party to avoid consolidation of all shares. Austrian tax authorities sometimes challenged this structure as being abusive where the size of the minority interest was notional, trust or similar arrangements were in place or other comparable circumstances justifying a "look through" for tax purposes. Under the new regime (see Question 25, Share sale), the minority interest must exceed 5% and it is not possible anymore to use a trustee for such purposes.

Asset sale

Reorganisation Tax Act. Certain share purchases can be structured as a merger, a spin-off or a contribution in kind, in which case the transaction may be eligible for the benefits available under the UmgrStG. In that case, transfer taxes can under certain conditions be avoided or reduced.

27. What corporate taxes are payable on a share sale and an asset sale? What are the applicable rates?

Share sale

Capital gains resulting from a sale of shares in a corporation generally increase the tax base for corporate income tax purposes. The rate of corporate income tax is 25% on the company's net profits. Capital gains from a sale of shares in a company that is not resident in Austria for tax purposes do not increase the tax base for corporate income tax purposes if the shareholding qualifies for the Austrian international participation exemption and the seller has not opted out of tax neutral treatment of capital gains (see Question 28, Share sale).

At the shareholder level capital gains taxation will depend on whether the sellers are domestic or foreign resident. For domestic shareholders, whether individuals or corporations, capital gains will be subject to a 25% tax. For foreign resident shareholders capital gains are subject to a 25% tax as well, if their participation in the Austrian target amounted to at least 1% in the last five years. However, tax treaties usually restrict the right of Austria to tax such capital gains, as Article 13(5) of the OECD Model Tax Convention, which is followed by most treaties concluded by Austria, assigns the right to tax such capital gains to the state of residence of the shareholder (unless a special provision for real estate companies applies).

Asset sale

Capital gains resulting from a sale of assets or business in a corporation generally increase the tax base for corporate income tax purposes. The rate of corporate income tax is 25% on the company's net profits.

If the seller, however, is an individual, the asset deal will usually trigger taxation of up to 50% (see Question 3, Share purchases: advantages/asset purchases: disadvantages).

28. What are the main corporate tax exemptions and reliefs in a share sale and an asset sale? Are there any common ways used to mitigate tax liability?

Share sale

Capital gains from a sale of shares in a company that is not resident in Austria for tax purposes are exempt from Austrian corporate income tax if the shareholding qualifies for the Austrian international participation exemption (and the shareholder has not opted out of tax neutral treatment of capital gains and capital losses). Requirements of the Austrian international participation exemption are that the:

  • Participation amounts to at least 10% of the stated share capital.

  • Participation is held for at least one year without interruption.

  • Foreign corporation is comparable to an Austrian corporation.

The exemption from corporate income tax is refused if a structure is considered generally abusive, or certain criteria under statutory tests indicating that they are abusive are met.

There is no comparable exemption for capital gains from a sale of shares in a corporation that is resident in Austria. On the other hand, dividends distributed by the Austrian target will be tax exempt for the recipient in the legal form of a corporation. Accordingly, it is common to distribute any accrued profits before the sale.

Asset sale

No specific corporate income tax exemption or relief is available for typical asset sales; relief can only be obtained in transactions that are structured as a reorganisation (Umgründung) that qualifies for the benefits of the UmgrStG (see Question 26, Share sale)

29. Are other taxes potentially payable on a share sale and an asset sale?

Austria levies stamp duty on certain transactions, including:

  • Leases (at a rate of 1%).

  • Assignments (at a rate of 0.8%).

  • Settlements (at a rate of 1% or 2%).

  • Easements (at a rate of 2%).

  • Sureties (at a rate of 1%).

  • Mortgages (at a rate of 1%).

Stamp duty is generally only triggered if a written deed (Urkunde) on the transaction or referring to the transaction is signed in Austria. Under certain limited circumstances stamp duty is also triggered if the deed is signed outside of Austria. If stamp duty was avoided by signing a written deed outside of Austria, the later import of that deed (or a certified copy) into Austria may trigger stamp duty. The Austrian tax authorities take a broad view of what constitutes a "deed" and accordingly triggers stamp duty and therefore avoidance schemes must be carefully structured.

30. Are companies in the same group able to surrender losses to each other for tax purposes? For example, can interest expenses incurred by a bid vehicle incorporated in your country be set off against profits of the target before tax?

In general, companies (whether belonging to a group or not) are taxed on a stand-alone basis. Companies belonging to the same group may elect to set up a tax group. In a tax group the fiscal results of the group members (within limits also foreign companies are eligible to participate), which are first determined on a stand-alone basis, are attributed to and taxed at the group parent level, where the taxable profits and losses of the group companies can be offset (in case of foreign group members only losses and only the pro-rata amount of the losses are attributed). If the aggregated fiscal result of the companies in the group and the group parent is negative, the loss can be carried forward at the level of the group parent.

Through the formation of a tax group between an acquisition company and the target company it is possible to deduct the interest expenses from an acquisition financing from the operational profits of the target.

The formation of a tax group requires a tax allocation agreement and an application to the relevant tax office. The required minimum period of a tax group is fulfilled when three full financial years have expired. If a group company leaves the tax group prior to lapse of the three-year period, that group company is retroactively taxed on a stand-alone basis. If all group companies leave the tax group prior to lapse of the three-year period, the group parent and each of the group companies are retroactively taxed on a stand-alone basis. Special recapture rules apply to foreign group members.



31. Are there obligations to inform or consult employees or their representatives or obtain employee consent to a share sale or asset sale?

Asset sale

The Labour Constitution Act (Arbeitsverfassungsgesetz) (ArbVG) provides for information and consultation rights of the works council (Betriebsrat) in general, as well as specifically in relation to:

  • Certain transactions (section 108(2a), ArbVG), including transfers of the entire or parts of the business, merger and consolidation.

  • Changes to the business (section 109, ArbVG).

The information must be given sufficiently in advance, in writing and in a manner which allows the works council to assess the relevant transaction or change. In case of a transaction, the information must specifically include the:

  • Reason for the transaction or measure.

  • Legal, economic and social consequences of the transaction.

  • Any associated measures which may affect employees.

The works council must be given an opportunity to comment on the transaction and propose measures mitigating adverse effects for the employees.

Where no works council is established an asset sale only triggers information requirements if a transfer of a business (Betriebsübergang) within the meaning of the AVRAG --is concerned. In that case, the seller or the purchaser must provide the employees affected with (section 3(a), AVRAG):

  • The planned date of the transaction.

  • The specific information set out above (that is, the reason for the transaction or measure, and so on).

Affected employees do not, however, have consultation rights. The purchaser must adjust the employment terms (Dienstzettel) within one month of the transfer and notify the transferring employees of changes to employment terms based on collective bargaining agreements, shop agreements and if it will take over pension commitments based on individual contracts. This notification can also be made by the seller on behalf of the purchaser in advance.

There is no obligation to obtain the consent of the employees affected. However, where by operation of section 3 of the AVRAG a transfer of a business (Betriebsübergang) results in the transfer of an employee to the purchaser together with the business, the employee can object to the transfer in certain limited circumstances (see Question 32).

Share sale

If a works council is established at the target company, the target company must inform the works council in accordance with section 109 of the ArbVG and consult with the works council on request. If no works council is established no information or consulting requirements apply.

32. What protection do employees have against dismissal in the context of a share or asset sale? Are employees automatically transferred to the buyer in a business sale?

Asset sale

The Austrian Supreme Court (Oberster Gerichtshof) (OGH) has held that a dismissal of employees in the course of an asset sale (both by the seller and the acquirer) is against good morals (bonos mores) (section 879, ABGB) unless there are valid economic, technical or organisational reasons unrelated to the asset sale. If dismissals occur in close proximity of an asset sale, there is a (rebuttable) presumption that such exceptions do not apply. In addition, the general rules of Austrian employment law concerning appeals against dismissals apply.

Share sale

There is no special protection against a dismissal in the context of a share sale. Only general rules of Austrian employment law concerning appeals against dismissals apply.

Transfer on a business sale

In case of a transfer of a business (Betriebsübergang), the employment relationships of the employees associated with the business transfer together with the business to the purchaser (section 3, AVRAG). Employees can object to the transfer within one month of the transfer where the seller does not cease (for example, a merger) and the purchaser is permitted to, and elects not to, maintain dismissal protection pursuant to a collective bargaining agreement or take over pension commitments based on a single contract.



33. Do employees commonly participate in private pension schemes established by their employer? If an employee is transferred as part of a business acquisition, is the transferee obliged to honour existing pension rights or provide equivalent rights?

Private pension schemes

Company pension schemes established by the employer are becoming increasingly common. Company pension schemes are regulated by the Austrian Company Pension Act (Betriebspensionsgesetz) (BPG) which recognises four different pension schemes.

Pensions on a business transfer

If an employment transfers on a transfer of a business (Betriebsübergang) by universal succession (for example, merger) the pension commitment becomes part of the individual employment contract of the transferring employee. Where a transfer occurs by operation of section 3 of the AVRAG without universal succession, the purchaser may elect not to take the pension commitments of the seller, in which case, the employee concerned can object to the transfer of his employment (see Question 32, Transfer on a business sale). If the employee does not do so, the pension commitment terminates and the seller must pay to the employee the amount of accrued pension (section 5, AVRAG).


Competition/anti-trust issues

34. Outline the regulatory competition law framework that can apply to private acquisitions.

Triggering events/thresholds

The following types of concentrations are subject to merger control (intra-group transactions are exempt) (section 7, Cartel Act 2005 (Kartellgesetz)):

  • The acquisition of an undertaking or a major part of an undertaking, especially by merger or transformation.

  • The acquisition of rights in the business of another undertaking by management or lease agreement.

  • The (direct or indirect) acquisition of shares, if thereby a shareholding of 25% or 50% is attained or exceeded.

  • The establishment of interlocking directorships where at least half of the management or members of the supervisory boards of two or more undertakings are identical.

  • Any other concentration by which a controlling influence over another undertaking may be exercised.

  • The establishment of a full-function joint venture.

A concentration must be notified to the Federal Competition Authority (FCA) if the following accumulative thresholds are fulfilled (based on the revenues of the last business year):

  • The combined worldwide turnover of all undertakings concerned exceeds EUR300 million.

  • The combined Austrian turnover of all undertakings concerned exceeds EUR30 million.

  • The individual worldwide turnover of each of at least two of the undertakings concerned exceeds EUR5 million.

However, even if the above thresholds are satisfied, no obligation to notify exists if:

  • The Austrian turnover of only one of the undertakings concerned exceeds EUR5 million.

  • The combined worldwide turnover of all other undertakings concerned does not exceed EUR30 million.

For calculating the turnover thresholds, the revenues of all entities that are linked with an undertaking concerned as defined in section 7 of the Cartel Act (see above) are considered one entity (therefore the turnover of a 25% subsidiary must be attributed fully). Indirect shareholdings only have to be considered if the direct subsidiary (of at least 25%) holds a controlling interest in the indirect subsidiary. Revenues of the seller are disregarded (unless the seller remains linked with the target undertaking as defined in section 7). Specific provisions for the calculation of turnover apply for mergers in the banking, insurance and media sectors.

Transactions that are notifiable in Austria may have an EU Dimension under Article 1 of Regulation (EC) 139/2004 on the control of concentrations between undertakings (Merger Regulation). In that case, the European Commission generally has sole jurisdiction to assess the case. However, the Cartel Act contains specific rules regarding media mergers which require a filing with both the European Commission and the FCA.

Notification and regulatory authorities

The relevant merger authorities in Austria are the:

  • FCA and the Federal Cartel Prosecutor (Bundeskartellanwalt) (FCP), collectively referred to as the Official Parties.

  • Cartel Court (Kartellgericht).

The Official Parties assess notifications in phase I proceedings. Should a notification raise competition concerns, either Official Party can apply to the Cartel Court to open phase II proceedings. Decisions of the Cartel Court may be appealed before the Supreme Cartel Court (Kartellobergericht). The Competition Commission (Wettbewerbskommission) is an advisory body that can give (non-binding) recommendations to the FCA as to whether or not to apply for an in-depth phase 2 investigation of a notified transaction.

A notifiable transaction must not be implemented prior to formal clearance. Possible sanctions for the infringement of this suspension clause are that the:

  • Underlying agreements or acts are null and void.

  • The undertakings can be fined up to 10% of the worldwide annual turnover (by the Cartel Court on application of the Official Parties).

Non-compliance with remedies imposed on the parties is equivalent in seriousness to breaching the suspension clause and may lead to similar fines.

Substantive test

A merger must be prohibited if it is expected to create or strengthen a market dominant position. An undertaking is generally considered market dominant for that purpose if it can act on the market largely independently of other market participants (the Austrian Cartel Act contains a rebuttable presumption of market dominance if certain market share thresholds are achieved). Even where a merger is expected to create or strengthen a market dominant position, it must nevertheless be cleared if either:

  • It will increase competition, and therefore the advantages gained by implementing the transaction will outweigh the disadvantages.

  • It is economically justified and essential for the competitiveness of the undertakings concerned.

A media merger will be assessed not only against its compatibility with competition rules, but also as to its adverse effects against media plurality (Medienvielfalt).



35. Who is liable for clean-up of contaminated land? In what circumstances can a buyer inherit and a seller retain liability in an asset sale and a share sale?

Polluter pays

Austrian environmental law follows the "polluter pays" principle (that is, whoever caused the pollution is primarily liable for its clean-up). If the polluter cannot be held liable (for example, if the polluter is unknown, has ceased to exist or is insolvent), the owner of the relevant property is secondarily liable if the owner:

  • Approved of, or tolerated the facilities (Anlagen) or measures (Maßnahmen) that resulted, or may result, in the contamination.

  • Did not take reasonable measures to prevent contamination.

This also applies to any successor in title (Rechtsnachtfolger) to the property if the successor knew of, or should have known of, the relevant facilities or measures that resulted, or may result, in the contamination. For contamination caused before 1990, the owner of the property can only be held liable if the owner explicitly approved of the relevant facilities or measures and obtained consideration for the use of his property. In that case liability is limited to any excess (if any) of the consideration received over the usual consideration for the use of the relevant property.

Passing of liability

Liability for clean-up generally remains with the polluter and is not inherited. This applies to an asset sale as well as to a share sale. In an asset sale, a purchaser may assume (as sole or joint and several debtor) primary liability where a transaction structure involves universal legal succession or section 1409 of the ABGB and/or section 38 of the UGB applies (see Questions 3 and 6). In addition, where the transaction involves a contaminated property, the purchaser may also inherit secondary liability (see above, Polluter pays).

In a share sale the legal entity (the target) which has caused, or may have caused, the contamination (primary liability) or owns the contaminated property (secondary liability) remains the same and accordingly liability for clean-up does not pass.


Online resources

Austrian laws in English


Description. This website is part of the official Austrian legal information system and contains a selection of Austrian laws translated into English. All translations are unofficial and only occasionally updated.

Contributor profiles

Florian Philipp Cvak, Partner

Schindler Attorneys

T +43 1512 2613

Professional qualifications. Admitted to the Austrian, New York and Polish bar.

Areas of practice. Corporate; M&A; finance.

Clemens Philipp Schindler, Partner

Schindler Attorneys

T +43 1512 2613

Professional qualifications. Admitted to the Austrian bar. Austrian certified public tax advisor.

Areas of practice. Corporate; M&A; tax.

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