Mergers & Acquisitions Introduction

The term “Mergers & Acquisitions”intends to cover different types of transactions which from a legal perspective do not have necessarily a common denominator. One may categorize them in three general categories each of them showing the following characteristics:

(a) Conversions where the company’s form changes but its legal personality remains unaffected (in Greek company law all commercial companies have legal personality). As a result no transfer of property takes place, company’s external relations with third parties are not influenced etc. Internally the company’s structure and the rights and obligations of its members experience more or less significant changes.
(b) Mergers and divisions in strict sense where at least one company ceases to exist and its assets and obligations are transferred uno actu (universal succession) to at least one company which already exists or is constituted. The absorbing company (or companies) substitutes the absorbed company (or companies) in all its rights and obligations (including pending litigation) and the members (shareholders) of the latter become members (shareholders) of the former.
(c) Asset and share deals where either company’s significant assets or even more company’s enterprise or sectors of it with all relevant assets and liabilities are transferred to a third party (potentially to a newly established subsidiary [spin off ]) under the regime of the common rules of the Greek private law or a change of control at shareholders’ level is effected through the transfer of a significant shareholding. The common characteristic of both cases from an economic perspective is the transfer (in broad sense) of the company’s enterprise or significant parts of it although the legal issues that arise are of different legal nature in each case: an asset deal (a special type of which is the spin off ) raises issues of creditors’ and minority shareholders’ protection similar to the ones in a merger. On the other hand, in a share deal the main legal issue is not a company law, but a pure contractual law one: the protection of the purchaser (of the shares) against potential defects of the company’s enterprise should the transaction be considered as a transfer of the company’s enterprise. A special type of share deal transaction is the change of control pursuant to a voluntary or mandatory takeover bid: this transaction refers to listed companies and is subject to special legislation.