AUSTRIA Trends and Developments Contributed by: Markus Fellner, Paul Luiki and Peter Blaschke, Fellner Wratzfeld & Partner
at reducing administrative burdens and making EU public markets more attractive, the EU Listing Act amends the Market Abuse Regulation (MAR) and the Prospectus Regulation. These changes are very important for M&A practitioners, as they directly affect long-standing issues in public takeovers and corpo - rate transactions. With respect to disclosure of information, the most sig - nificant change is the amendment to Article 17 MAR regarding the disclosure of inside information in pro - tracted processes. Historically, the obligation to dis - close inside information as soon as possible applied to intermediate steps of a transaction (eg, signing a term sheet or reaching a milestone in negotiations). This forced issuers to rely on the complex “delay of disclosure” mechanism to prevent premature leaks of information about deals, which posed severe con - sequences for those involved in the event of a leak. Under the new EU Listing Act, the disclosure obliga - tion in protracted processes now attaches strictly to the final event or circumstances (eg, the signing of the definitive share purchase or merger agreement). While intermediate steps may still constitute inside information that is prohibited from being used, inter - mediate steps no longer trigger an immediate ad hoc disclosure obligation. This significantly mitigates the risk and compliance burden for persons involved in sensitive M&A negotiations. Pre-deal communications have also been simplified. The EU Listing Act clarifies in its Recitals 64 et seq that the established market sounding regime pursuant to Article 11 MAR shall be considered an optional safe harbour rather than a mandatory set of rules. This pro - vides greater flexibility when assessing investor appe - tite prior to announcing a transaction or a related capi - tal increase. Furthermore, the administrative burden of maintaining insider lists has been reduced through a simplified, harmonised template, saving valuable time during fast-paced deal executions. For M&A transactions utilising share consideration, the amended Prospectus Regulation offers further relief. The exemption threshold for admitting new, fungible shares to trading without publishing a pro - spectus has been increased from 20% to 30% of the shares already admitted to the same regulated market
over a 12-month period. This allows listed compa - nies to execute larger share-for-share acquisitions or raise acquisition financing much faster and without the costs associated with prospectus approval. Essentially, the EU Listing Act seems to provide the long-awaited practical relief that public M&A transac - tions require, allowing dealmakers to concentrate on executing transactions rather than navigating exces - sive regulatory obstacles. EU CSDDD and its expected impact on M&A The Directive (EU) 2024/1760 (Corporate Sustainabil - ity Due Diligence Directive – CSDDD) aims to trans - form corporate social responsibility from a voluntary initiative to a strict legal obligation. This EU directive needs to be transposed into Austrian law by 28 July 2028. The so-called EU Omnibus Package in February 2026 raised the thresholds to 5,000 employees and EUR1.5 billion in turnover. Nevertheless, the CSDDD is expected to have a large impact on many M&A transactions. Buyers with respective market power will likely pass on their due diligence obligations to smaller target companies, effectively making SMEs compliant in order to remain investable. The CSDDD requires that the member states establish a framework so that companies integrate due diligence processes into their policies, carry out risk-based analyses of the activity chain and establish preven - tive measures and complaint mechanisms. Regarding enforcement, Article 29 CSDDD establishes a civil lia - bility for damages resulting from breaches of duty. As is customary with EU legal acts, the respective sanc - tions shall be deterrent but proportionate. In the M&A context, this shifts the focus of due diligence from compliance with mere local regulations to a much broader global context. Among others, missing data on suppliers will increasingly become a deal-breaker, as buyers must also make sure that a functioning risk management system is in place. Financially, the CSDDD directly impacts company valuation. Ongoing compliance costs increase oper - ational expenditures and disproportionately reduce EBITDA and company value. One-off investments to remedy irregularities or provisions for fines are also deducted directly from the purchase price as debt-like
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