Category: Austria

Schima Mayer Starlinger has advised +Simple on its acquisition – via German subsidiary Carl Rieck – of a portfolio of insurance brokerages from Austria-based Alt+Partner.

+Simple, founded in 2015, is a French digital insurance platform. According to SMS.Law, it “simplifies the underwriting of business insurance by providing its customers with a one-stop-shop solution, supported by its partnerships with major clients and local brokers … +Simple currently covers 500 professions through 29 adapted solutions and serves more than 100,000 customers.”

SMS.Law’s team included Partners Philipp Gamauf and Stephan Schmalzl, Attorneys at Law Sarah Lurf and Stefan Burischek, and Associates Matthias Gangl and Stefan Knotzer.

SMS.Law did not respond to our inquiry on the matter.

Under Article 30 (5) (c) of Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing (AML Directive 2015), Member States are obliged to ensure that information on beneficial ownership is accessible by any person or organisation that can demonstrate a legitimate interest in obtaining it.

Directive (EU) 2018/843 of the European Parliament and of the Council (AML Directive 2018) amended (and softened) the original provision on access to information of the AML Directive 2015 by extending the right to access to any member of the general public, with no requirement to demonstrate a legitimate interest. Article 30 (9) of the AML Directive 2018 grants Member States the possibility to provide for an exemption right to restrict the access to all or part of the information on the beneficial ownership on a case-by-case basis, applicable only in exceptional circumstances.

Section 10 of the Austrian Beneficial Owners Register Act – WiEReG (Austrian UBO Act) allows the public to request an excerpt from the public register via the website of the Austrian Ministry of Finance, with no requirement to demonstrate a legitimate interest. The Austrian legislator has implemented the above-mentioned exemption right (Article 30 (9) of the AML Directive 2018) in Section 10a of the Austrian UBO Act.

Underlying legal proceedings

The Luxembourg District Court was recently occupied with two legal actions. One was brought by a domestic company and the other by the beneficial owner of the company, in which the plaintiffs sought a restriction of access to the register data according to the respective Luxembourgish national law (upon such request being rejected by the Luxembourg UBO register), which implemented the exemption right set out in Article 30 (9) of the AML Directive 2018. The Luxembourg District Court agreed and considered that the disclosure of such publicly available information could entail a disproportionate risk of interference with applicable fundamental rights and thus referred a series of legal questions to the European Court of Justice (ECJ) for a preliminary ruling. The legal questions referred included questions concerning the interpretation of Article 30 of the AML Directive 2018 and the validity of its provisions in light of the Charter of Fundamental Rights of the European Union (the “Charter”).

Considerations of the ECJ

According to the ECJ (ECJ No 188/2022; joined cases C-37/20, C-601/20), the general public’s access to information on beneficial ownership constitutes a serious interference with fundamental rights, particularly under Article 7 (respect for private and family life) and Article 8 (protection of personal data) of the Charter. Against this backdrop, the ECJ declared Article 30 (5) (c) of the AML Directive 2018 invalid.

In a nutshell, the ECJ ruling is based on the following considerations:

• the interference with the fundamental rights is neither limited to what is strictly necessary nor proportionate to the objective pursued;
• the regime introduced by the AML Directive 2018 amounts to a considerably more serious interference with the fundamental rights guaranteed in Articles 7 and 8 of the Charter than the former regime;
• the respective severe interference is not offset by any benefits;
• the difficulty raised by the EU Commission to provide a precise definition of the cases and conditions in which a legitimate interest exists (as stated in the former regime) does not justify this new regime either; and
• the possibility of providing restrictions by national law does not balance out the interference and the objective and does not guarantee the absence of risks of abuse.

Conclusion

The long-term impact of this ECJ ruling and the implementation of sufficient protective measures by the Member States remains to be seen. However, the short-term effects became evident already just one day after the ruling, as, for instance, the Dutch Ministry of Finance and the Austrian Ministry of Finance have already blocked (general) public access to their respective registers.

Nevertheless, legal entities (Rechtsträger) can still access the Austrian UBO register pursuant to Section 5 of the Austrian UBO Act and obliged persons (Verpflichtete) pursuant to Section 9 via the Austrian company service portal (Unternehmensserviceportal). Likewise, the mandatory reporting of beneficial owners remains in place.

By Michael Marschall, Attorney at law, and Verena Krikler, Associate, Schoenherr

Cerha Hempel has advised Spar on its cooperation agreement with vegan-vegetarian chef Paul Ivic.

“Spar and its partners have been promoting sustainability in Austria for years with great commitment and numerous measures,” Cerha Hempel informed. “With the vegan-vegetarian star chef Paul Ivic, this commitment now has a strong ambassador who will stand up for sustainable enjoyment together with Spar.”

Founded in 1932, Spar is a retail store with a presence in 48 countries.

The Cerha Hempel team was led by Partner Bernhard Kofler-Senoner and included Partner Holger Bielesz, Senior Associate Alina Alavi Kia, and Associate Philipp Schaubach.

The increasing US-based investor interest in Austrian tech start-ups – despite the hard times and a certain lack of governmental decisiveness – is creating a buzz in the country, according to DLA Piper Austria Managing Partner Christoph Mager.

“There has been a markable uptick in the levels of US-based investor attention looking at the Austrian market,” Mager begins. “One of the contributing factors to this has been a government initiative to support local technology and technology-adjacent sector start-ups,” he explains. “The growth cycle of these kinds of start-up companies has been heavily incentivized by the Austrian government, to the point of establishing dedicated agencies to evaluate these companies.” 

Based on a start-up’s capacity to attract financing, their business plans, and business models, as well as professional backgrounds, Mager says the Austrian government offered “targeted incentives – especially during the worst COVID-19 moments – and these companies started growing and growing. In particular, software development companies and those making efforts to usher in digitalization are at the forefront,” he reports. 

Mager goes on to explain that, even with the Austrian market being “rather small, there are promising start-ups that are knocking on the door of such growth levels as to attract venture capital or even private equity financing. Given such promise, it is not surprising that US-based investors are coming around.” Even with Austria having a somewhat stringent regime for screening foreign direct investments, Mager says that investor appetite is not affected. “US investors are accustomed to heavy screenings and rigorous regulations – so it is not an obstacle,” he says. “Overall, these are massively beneficial signs for our economy – all of these companies being local – there is a huge amount of know-how entering the country.”

And, speaking about the economy, Mager reports that it is still quite internationally orientated, even in trying times. “The economy is doing great overall, though there are companies that are struggling – primarily those that have energy-heavy production processes,” he reports. “Those who are struggling the most could see their customers and investors seeking to get what they need, and there is a lot of competitive pressure, especially coming in from Asia and America,” Mager reports.

Finally, assessing the current status of legislative activities, Mager explains that he is surprised the “government isn’t introducing more initiatives. There is no clear focus or decision for increasing the focus on helping the economy and businesses survive these tough times. The primary focus for the government has been the population, with a lot of talk about introducing safety measures such as energy price caps – however, more determination would be needed when it comes to businesses,” he says. In conclusion, Mager shares that he feels “nothing major will change over the next six months. There is still comfortable investor interest in the Austrian markets, and the economy is robust – we’ll do okay,” he concludes.

Wolf Theiss, working with Baer & Karrer, has advised Farner International AG on its acquisition of the Vienna-based Kobza Media Group. B-legal | Blumauer & Partner advised Kobza Media Group.

The Kobza Media Group consists of KTHE, Alpha_z, Massgeschneidert, and Darwins Lab, as well as a majority stake in Diego5 and its subsidiaries. Completion of the transaction is contingent on regulatory approval.

According to Wolf & Theiss, “Swiss-based Farner, founded in 1951, started a partnership with Waterland Private Equity in January 2022 with the objective to establish a leading integrated European communications provider as a trusted partner for clients for national as well as international campaigns.”

Wolf Theiss’ team included Partner Florian Kusznier, Counsels Stefan Wartinger and Paulina Pomorski, Consultant Karin Spindler-Simader, Senior Associates Christopher Juenger and Anna Schwamberger, and Associates Nikolaus Wollner, Carolina Brunnmayr, and Miranda Ellison.

B-Legal’s team included Partner Georg Blumauer and Attorneys Veronika Fussenegger-Vanas and Sonja Ott.

Dorda, working with Choate, Hall & Stewart and Armstrong Teasdale, has advised PDFTron on its acquisition of Eversign. EY Law advised the sellers.

PDFTron is a document processing technology provider for developers and enterprises. 

Eversign, founded by Paul and Julian Zehetmayr, is an Austrian start-up that provides a service that offers digital signatures for documents.

Dorda’s team included Partners Christoph Brogyanyi, Heinrich Kuehnert, Martin Brodey, Christian Ritschka, Nino Tlapak, and Bernhard Mueller, Counsel Andreas Seling, Attorneys-at-Law Patricia Backhausen, Manuel Mayr, Florina Thenmayer, Stanislav Nekrasov, Julia Haumer-Moerzinger, Julia Haunold, and Magdalena Nitsche, and Associates Angelika Holzer, Mirko Marjanovic, Corina Krues, Valentina Possegger, Emina Dedic, Anna Martseva, and Benjamin Kraudinger.

EY Law’s team included Partner Georg Perkowitsch, and Attorneys at Law Marie Winter, Roman Jatzko, David Konrath, Martin Hanzl, Ermano Geuer, Georg Harer, and Sebastian Manschiebel, and Associates Denisa Boeck and Alexander Glaser.

E+H has advised Ecowind on its joint venture with EVN subsidiary EVN Naturkraft for the construction of a 24.5-megawatt floating photovoltaic plant in Grafenwoerth.

Ecowind is an Austrian general contractor for wind and solar projects. It has been developing, planning, and constructing renewable energy projects in the field of wind power and photovoltaics in Austria and CEE since 1995.

EVN is an Austrian utility company.

According to E+H, “the joint project company is constructing the largest floating photovoltaic plant in Central Europe in Grafenwoerth (Lower Austria, Tulln district). With a capacity of 24.5 megawatts, the energy project is expected to supply around 7,500 households with green electricity starting in spring 2023.”

E+H’s team included Partners Tatjana Katalan, Clemens Lanschuetzer, and Judith Feldner, Attorney at Law Marie Sophie Reitinger, and Associates Wolfgang Koefer, Teresa Moerth, and Alexander Christoph Moser.

E+H has advised Flapjack on the closing of a pre-seed convertible loan financing round with investors from Graz and Vienna.

Graz-based start-up Flapjack specializes in the development of self-learning software for robots in a wide range of application areas. According to E+H, “Flapjack’s technology is particularly dedicated to the adaptability of robots by observing and mimicking humans through perception technology and imitation learning. Flapjack is using the investment amount to complete the research and development of the minimum viable product and to expand its operations further.”

E+H’s team included Partner Philipp Schrader, Attorney Steve Jeitler, and Associate Florian Vidreis.

Wolf Theiss has advised Midway Holding subsidiary Haki on its acquisition of Ekro Bausystem. Schneeweiss Weixelbaum advised the seller.

According to Wolf Theiss, “the acquisition of Ekro Bausystem by Midway Holding became effective on October 4, 2022, and complements Midway Holding’s Safe Access Solutions business area, enabling a geographic expansion in the German-speaking, primarily Austrian market.”

Midway Holding is a Swedish-listed conglomerate that acquires and develops small and medium-sized companies. Its subsidiary Haki offers scaffolding systems and services for industry, infrastructure, and construction projects.

Ekro Bausystem is an Austrian construction supplier.

“We see good synergies on the cost side, primarily through opportunities for a common supply chain with other operations in the safe access solutions business area,” Midway Holding President and CEO Sverker Lindberg commented. “It is with great pleasure that we welcome the employees of Ekro Bausystem into the Haki family.”

The Wolf Theiss team included Partners Andrea Gritsch, Matthias Unterrieder, Birgit Kraml, Roland Marko, and Robert Wagner, Senior Associates Harald Strahberger and Marion Schimboeck, and Associates Angela Liu, Pascal Gstoettner, and Miranda Ellison.

The Schneeweiss Weixelbaum team included Partners Hermann Schneeweiss and Florian Weixelbaum and Paralegal Tobias Wasmeyer.

Dominik Juster has joined the E+H partnership in Austria.

According to the E+H, he works in the firm’s Corporate/M&A, Insolvency/Restructuring, Capital Markets, and Banking/Finance practice groups. He has been with E+H since 2011, making Associate in 2016. Between September 2018 and June 2022, he spent time as an Associate with Simpson Thacher & Bartlett in London, before re-joining E+H.

“We are particularly excited that we have been able to welcome Dominik to our partnership,” commented Partner Peter Winkler. “After he started his career more than a decade ago with E+H, he has gained comprehensive international experience in London over the past four years.”