Corporate Mergers in Greece

What is a “Company Merger”?

A merger, as defined by law, is the legal act by which an existing or newly established company acquires, through succession, the assets of other companies that are dissolved without liquidation. The most common form of merger is one carried out through the “absorption” of one or more companies (the absorbed companies) by another (the absorbing company).

Almost all provisions under Greek law concerning a merger by “absorption” also apply to a merger involving the formation of a new company, while there are also some specific provisions regarding the participation of partners in private companies.

How does a merger by “absorption” work?

The merger process is relatively simple, and with the cooperation of all partners, it can be completed quickly without negatively affecting the operations of the new corporate structure. Very briefly, the steps are as follows:

1. Drafting the merger agreement. By law, this draft must include certain basic information, such as the name of the companies, the exchange ratio of the corporate interests, and the rights granted to the partners or shareholders.
2. Publication of the draft merger agreement. Publication is carried out in accordance with the provisions of Law 3419/2005 (GEMI).
3. Information Report on the Merger. This report provides a detailed account of the draft agreement and is intended to explain the economic and legal reasons underlying the Merger.
4. Review of the draft by experts. Independent experts review the draft agreement and prepare a report, which is published in the General Commercial Registry (GEMI).
5. Approval of the Merger and drafting of the Agreement. Once the draft is approved by the companies’ General Meetings, the Agreement is drafted by the companies’ representatives.
6. Preliminary review and publication of the Agreement. The governing bodies of the companies conduct a comprehensive review of all transactions up to and including the drafting of the Merger Agreement. Finally, the Merger is also subject to the provisions of Law 3419/2005 (GEMI).

What are the resulting benefits?

For the most part, the partners/shareholders who decide to merge two or more companies aim to achieve a series of advantages secured through the merger.

This process, therefore, contributes to more efficient and faster oversight of all commercial transactions carried out by corporate bodies; it facilitates the consolidation of the assets of companies with common commercial interests under a single legal framework, while at the same time facilitating decision-making by the governing bodies, since procedures are now consolidated. Another very important factor is that, through the merger and the process described above, the partners/shareholders gain a complete picture of the company’s financial and commercial situation, while also having the opportunity to correct or change whatever they wish.

Conclusion

A corporate merger in Greece is a fairly straightforward process. With the cooperation of the shareholders and their coordinated actions, the process can be accelerated even further, since the law allows for the omission of some of the steps outlined above, such as the merger report (Step 5 in this document). The resulting benefits are numerous and pertain to both the financial and commercial operations of companies.

Nexus Law Firm handles the entire merger process quickly and efficiently, meeting all the needs of companies seeking to improve and upgrade their services.