Legal aspects when buying a business in Greece

Legal aspects in M&A when buying a Greek company

Should an M&A advisor be informed about the Legal landscape? Legal aspects are of high importance when buying a business. Your advisor needs to be up to date with the legal framework that applies to M&A transactions in Greece. Here it is mentioned selected aspects that you need to consider when acquiring a company in Greece. In general, a part of the legal environment is similar to international law. We also touch upon some of the legal regulations for M&A projects in Greece that are clearly different.

General Legal M&A introduction when buying a Greek business

It is important for the parties involved in a transaction to agree on the structure of the acquisition and the relevant assets included in the scope, before the commencement of any negotiation process. Important to know is whether the transaction relates to an asset-deal or a share-deal. In a share deal it is important if the acquisition involves the transfer of part or all of the share capital of the target or whether the acquisition involves the merger of two or more entities. Main documents that are being used are the MOU (Memorandum of Understanding), the NDA (Non-Disclosure Agreement), the LOU (Letter of Understanding), the SPA (Share Purchase Agreement) and the NCA (Non-Compete Agreement). In this sense legal aspects in Greece don’t differ that much from global practise. We are expanding the LOU type that is most common to be used is a binding format which means that the Letter of Understanding has binding legal consequences.

Legal contents around the LOU

A typical LOU (Letter of Understanding) in Greece will normally involve the following terms and conditions:

  • Names of the acquirer, seller and target company;
  • Structure of the transaction;
  • Purchase price or issue price in case of capital injection and basic assumptions regarding the valuation (cash free – debt free etc.);
  • Mechanism of payment of the purchase price and escrow mechanism if any;
  • Conditions precedent of the acquirer and seller if any, conditions precedent specific to the transaction (such regulatory approvals etc.);
  • Process forward and outline of steps (financial, legal, technical, enviromental due diligence, approvals of the corporate bodies of the entities etc.) and provisions related to access of company records;
  • Conduct of target’s business for the period between signing of the LOU and signing of the SPA (Share Purchase Agreement);

Information about legal aspects in Greece

Feel free to contact us is you have any questions about the legal aspects of buying a business in Greece. Visit the profile of M&A advisor Christos Roussis to find out what he can do for you on buying a business in Greece.