[Last updated: 1 January 2025, unless otherwise noted]

2.1 Main legal framework

The main piece of takeover legislation in Austria is the Austrian Takeover Act, which has been in force since 1999 ("Austrian Takeover Act"). It has subsequently been amended several times, notably in 2006, when it was brought in line with the European Takeover Directive (Directive 2004/25/EC) ("Takeover Directive"), in 2013, when the legislator permitted (limited) judicial review of the ATC's decisions by the Austrian Supreme Court, in 2018, when new delisting rules were introduced, and finally in July 2022, when - following a recent decision of the European Court of Justice (CJEU, Case C-546/18) – a broader right to full judicial review by the Vienna Upper Regional Court was introduced. The original Austrian Takeover Act was largely modelled on the UK Takeover Code.

2.2 The Austrian Takeover Commission

Public offers and any proceedings relating to the Austrian takeover laws fall within the competence of the ATC. The ATC is a specialized supervisory authority focusing exclusively on public takeovers and adjacent matters, and as such is separate from the Austrian Financial Market Authority.

The ATC is an independent quasi-judicial body with a permanent office (employing two to four lawyers on average) with decisions rendered by one of three panels (Senate). Each panel consists of four members. The members of the ATC are jointly appointed by the Minister of Finance and the Minister of Justice. Each of the three consists of a chairman, one sitting judge and one member each nominated by the Austrian Chamber of Commerce and the Austrian Chamber of Labor.

All members of the ATC enjoy judicial independence in relation to their function, and government ministers have no instruction rights in relation to the activities of the ATC. With one member of each panel being a sitting judge, the ATC qualifies as an independent tribunal within the meaning of the ECHR and under Austrian constitutional law. Thus, it may rule on civil law matters as well as administrative sanctions.

Appeals against decisions of the ATC in administrative criminal proceedings are decided upon by the administrative court. Appeals against all other decisions can be lodged with the Vienna Upper Regional Court. The introduction of the Vienna Upper Regional Court’s appellate jurisdiction following the 2021 European Court of Justice's decision in Case C-546/18, which held that the previous, very limited appellate jurisdiction of the Austrian Supreme Court was incompatible with EU law.

2.3 Foreign investments

The current foreign direct investment screening regime was enacted in 2020. The 2020 Austrian Investment Control Act has significantly broadened the scope of the foreign investment review process in Austria, and now covers both direct and indirect acquisitions in a wide range of sensitive sectors. It applies to acquisitions by non-EU/EEA acquirers, or involving acquirers controlled (directly or indirectly) by non-EU/EEA persons or entities.

The broad drafting of the Act means that larger transactions are generally likely to require clearance by the Federal Minister of Labor and Economy. Transactions involving companies in the relevant sectors are subject to approval if they result in the acquisition of 10% (only applicable to companies operating in highly sensitive sectors), 25% or 50% of the voting rights of a relevant target.

2.4 General principles

The Austrian Takeover Act sets out a number of general principles which essentially mirror the principles laid down in the European Takeover Directive:

• Equal treatment of shareholders – Holders of securities in listed companies must be treated equally if of the same class. This specifically applies to the treatment of shareholders holding the same class of shares in the company. The principle of equal treatment results, in particular, in the obligation of a bidder to offer all shareholders (who are of the same class) the same per-share price. Offering benefits beyond the offer price to certain shareholders or group of shareholders is not permissible. This principle applies for a period from one year prior to the public offer until 9-12 months following the completion of the public offer, subject to certain exceptions.
• Exits right upon change of control – In case of change of control over a listed company, all shareholders must be given the right to sell their shares to the bidder. This does not exclude the ability of certain shareholders to waive this right in relation to a specific bidder.
• Information and time for decision making – The addressees of a public offer must be provided with adequate information regarding the offer and need to be given sufficient time to decide upon the offer. Thus, the offer document needs to comply with certain requirements as to form and content. Furthermore, the offer period needs to be two weeks minimum, whereas the vast majority of public offers in Austria provide for offer periods exceeding the two-week minimum. There is no first come first served principle.
• No obstruction of the target company – Notwithstanding the general principle above, public offers need to be conducted quickly. The reason behind this principle is that the management of a target company should not extensively be occupied with takeover offers instead of managing the target company's business. As a consequence of this principle, bidders who have failed to successfully complete their offers, i.e., the minimum acceptance requirement has not been fulfilled in the case of an offer to acquire control, are, in general, precluded from launching another offer within a period of one year (the so-called 'blocking period'). However, the bidder is exempted from this rule if the interests of the target company and its shareholders are not endangered, which is usually the case if the second offer is friendly and an attractive price is offered.
• Duty of the target company's boards – In case of a public offer, the management and supervisory boards of the target company must act in the interests of the shareholders, the employees and the creditors, and also needs to take public interests into consideration. Although this principle suggests that the boards may also frustrate a bid if not in the interest of a certain party, e.g., the employees, the boards are nevertheless bound by a strict neutrality rule (provided for under § 12 of the Austrian Takeover Act), requiring the boards to abstain from any action that may deprive the shareholders from their right to make a free and informed decision about the public offer. In general, the boards may only take defense measures against a hostile offer if (i) authorized by the general meeting of the target company or (ii) the boards have partly implemented such measures at the time the bidder announces its intention to launch a bid.
• Prevention of market distortions – Steps must be taken to prevent any distortion of the normal market functioning and pricing, in particular, with respect to the shares of the target company and the bidder company, in the course of a public offer.