Category: Austria

Eisenberger + Herzog has advised the Immola Group on the sale of its residential project in Graz to Wealthcore. Eversheds Sutherland reportedly advised Wealthcore on the deal.

Immola is an urban development company. Wealthcore Investment Management offers individual investment products for investors. The transaction was carried out as part of a forward deal. Financial details were not disclosed. 

According to E+H, “the new project will cover a total area of approximately 4,300 square meters and is located on the corner of Babenbergerstrasse and Keplerstrasse, close to Graz’s main train station. When completed in 2023, the residential project will offer 63 residential units, underground parking spaces, and commercial space at the street level.”

E+H’s team included Partner Alric Ofenheimer, Associate Helena Neuner, and Lawyer Johannes Feilmair.

The Austrian Federal Competition Authority (FCA), together with the German Federal Cartel Office (FCO), has published an update to its guidelines on the application of the transaction value thresholds (Guidelines).

The transaction value thresholds were introduced in Austria and Germany in 2017 to adapt the merger control regime to cases such as acquisitions of start-ups by incumbents which do not meet the primary turnover thresholds but were nevertheless considered to require merger control scrutiny in order to protect innovation and competition in dynamic economic environments. Pursuant to Austrian law, a transaction that does not meet the primary turnover thresholds requires merger control approval if (i) the transaction value is above EUR 200m, (ii) the parties’ combined revenue exceeds EUR 300m worldwide and EUR 15m in Austria, and (iii) the target company has significant domestic activities.

The latest changes to the Guidelines relate to the notion of significant domestic activities. The changes are a consequence of the new second domestic turnover threshold, which was introduced in Austria with effect from 1 January 2022. Now, a filing obligation based on the primary turnover thresholds requires that in addition to the previous criteria, each of at least two companies has a minimum of EUR 1m domestic turnover.

This amendment has now also been reflected in the transaction value threshold. Going forward, a target company will be considered to meet the local nexus test if it has at least EUR 1m (previously EUR 500k) of revenue in Austria, provided that income from sales adequately reflects the market position and the competitive potential of the target company (Guidelines, para 83). However, particularly in digital and very innovative industries, income from sales (i.e. turnover) is often not an appropriate benchmark for market relevance. The increase to EUR 1m will therefore bring relief only for transactions in traditional sectors. In Facebook/Giphy, for example, the Austrian Cartel Court stated that the value of digital companies is predominantly not defined by turnover but rather by data. Data-based significance may be assessed by looking into recognised industry benchmarks (e.g. user numbers (monthly active users) or the access frequency of a website (unique visits; Guidelines, para 67)). In line with this, Giphy was found to have significant domestic activities because more than 0.5 to 1m Austrian (indirect) users sent at least one Giphy GIF in May 2020.

Furthermore, the Guidelines indicate that a target company is presumed to have significant domestic activities if

• it has a subsidiary in Austria (Guidelines, para 68); and / or
• it has a share of more than 10 % on the relevant market in Austria (which was included in the revised Guidelines based on the Cartel Court decision in Salesforce/Tableau that concerned the acquisition of a target company active in the provision of business intelligence (BI) software solutions with a market share of 5 to 10 % in the software segment for modern BI platforms in Austria; see Guidelines, para 83) irrespective of its domestic turnover.

Thus, when assessing local nexus under the revised transaction value test, the following should be taken into consideration:

• local turnover of the target;
• whether the target has a subsidiary in Austria; and
• market position of the target in Austria, relative to its main competitors.

By Evelin Hlina, Counsel, Schoenherr

CMS has advised Austria’s Alpla on its investment in Swedish start-up Blue Ocean Closures in a joint venture with the Glatfelter Corporation. Setterwalls reportedly advised Alpla on Swedish law-related issues. DLA Piper reportedly advised Glatfelter in Sweden.

Alpla specializes in plastic packaging solutions, producing packaging systems, bottles, caps, and injection-molded parts for a range of industries. Blue Ocean Closures develops cellulose-based biodegradable products, such as screw caps.

“We are investing continuously in the research and use of alternative, bio-based packaging materials to complement our product portfolio,” Alpla’s Director of Corporate Research, Development, and Innovation Christian Zmolnig commented. “Now we are looking forward to bringing our expertise into the new cooperation with Glatfelter and BOC.”

“We are pleased about the partnership with leading companies from the industry. In addition to a common vision for a sustainable future, they also bring enormous competencies in the field of production technology and materials science into our company,” Blue Ocean Closures Chief Executive Officer Lars Sandberg added.

CMS previously advised Alpla on a range of deals, including the acquisition of Wolf Plastics (as reported by CEE Legal Matters on October 27, 2021), a joint venture with Ecohelp and UPT (as reported by CEE Legal Matters on October 14, 2021), the acquisition of recycling companies in Spain (as reported by CEE Legal Matters on November 22, 2019), and a joint venture for recycled plastics in Thailand (as reported by CEE Legal Matters on October 1, 2019).

The CMS team included Partners Alexander Rakosi and Dieter Zandler and Lawyer Georg Gutfleisch.

Binder Groesswang has advised German Nissan Center Europe on the sale of its Austrian dealer and sales network to Spanish mobility provider Astara Mobility, formerly Berge Auto. Cerha Hempel advised Astara.

The transaction is expected to close by February 2022.

According to Binder Groesswang, “the Austrian transaction follows the recent previous sale of Nissan Center Europe’s dealer and distribution network in Switzerland to Bersan Automotive Switzerland. Nissan’s aim of transferring its activities in Austria and Switzerland is to streamline Nissan Center Europe’s sales and service structures and, subsequently, further improve the performance of its business in Germany.”

Binder Groesswang’s team included Partners Philipp Kapl, Ingeborg Edel, Christine Dietz, Christian Wimpissinger, and Horst Lukanec, Counsel Isabelle Innerhofer, Associates Lukas Pechtl and Alexander Scharkosi, and Attorney Manuel Mullner.

Cerha Hempel’s team included Partners Heinrich Foglar-Deinhardstein, Anna Wolf-Posch, Benjamin Twardosz, and Mark Krenn, Counsels Christoph Reiter, Jakob Hartig, and Christopher Peitsch, Attorney Marko Vladic, and Associates Florian Wunscher, Michaela Kober, Marcus Lusar, Nikolaus Feldscher, Philipp Schaubach, and Boris Treml.

Eisenberger + Herzog has advised Wien Energie on the establishment of a joint venture with the Riddle&Code blockchain company, called Riddle&Code Energy Solutions. Brandl Talos advised Riddle&Code on the deal.

According to E+H, “the joint venture will develop digital products for the energy market based on blockchain technology, in order to facilitate climate protection and decarbonization.”

Wien Energie is Austria’s largest regional energy provider and a subsidiary of Wiener Stadtwerke. The company supplies two million customers with electricity, heating, cooling, electromobility, and telecommunications.

The E+H team included Partner Marco Steiner, Attorneys Christoph Lejsek and Fabian Larcher, and Associate Matthias Pallisch.

The Brandl Talos team included Partner Thomas Talos, Attorney Stephan Strass, and Associate Celine Dobnikar.

An act implementing the cross-border distribution of funds Directive (the “CBDFD“) into Austrian law (the “Act“) finally entered into force on 11 December 2021. The Austrian legislator was already late with the implementation, since EU Member States were required to transpose the CBDFD into national legislation by 2 August 2021.

The main purpose of the CBDFD is to harmonise and facilitate the cross-border marketing and distribution of alternative investment funds (AIFs) within the EU. This legislative initiative goes back to the issue faced by many fund managers wishing to test investor appetite for a particular investment idea or investment strategy in different EU Member States. Here the treatment of pre-marketing (i.e. activities not yet amounting to the regulated activity of “marketing”) varied considerably across the EU. While some EU jurisdictions have already provided for pre-marketing rules (specifically laying down the conditions under which pre-marketing would be permitted), other EU jurisdictions have so far not been allowing pre-marketing activities at all. The CBDFD seeks to address this issue by introducing a new harmonised pre-marketing regime within the EU.

Besides adopting the new harmonised pre-marketing rules, the CBDF package (i.e. the CBDFD together with the directly applicable Regulation (EU) 2019/1156) provides for further changes to the regulatory regimes applicable to undertakings for collective investment in transferable securities (UCITS), AIFs and fund managers.

Below we would like to shed some light on the major legal changes introduced by the Act:

• Pre-marketing: Pre-marketing rules require that any information presented to professional investors by an EU manager of alternative investment funds (AIFM) must not (i) be sufficient to allow investors to commit to acquiring units or shares of a particular AIF (i.e. the information provided must not constitute an offer capable of acceptance, (ii) amount to subscription forms or similar documents whether in a draft or a final form, or (iii) amount to constitutional documents, a prospectus or offering documents of a not-yet-established AIF in a final form. Where draft prospectuses or offering documents are provided to professional investors, they must not contain information sufficient to allow investors to take an investment decision and must clearly state that (a) they do not constitute an offer or an invitation to subscribe to units or shares of an AIF, and (b) the information presented therein should not be relied upon because it is incomplete and may be subject to change. While not requiring a marketing notification pursuant to the Austrian Investment Fund Manager Act (“AIFMG“; implementing Directive 2011/61/EU into Austrian law), EU AIFMs will need to send a notification in written form to their home state regulator within two weeks of the pre-marketing in Austria having begun. The notification letter must specify in which EU Member States and for which periods the pre-marketing is taking or has taken place, together with a brief description of the pre-marketing (including information on the investment strategies presented and the AIF(s) covered).

  Any subscription by professional investors made within 18 months of pre-marketing activities having commenced will be considered the result of marketing and will be subject to the applicable (marketing) notification procedures provided for under the AIFMG. To that effect, commencing any pre-marketing activity will preclude reliance on reverse solicitation for a period of (at least) 18 months.

  Any third party carrying out pre-marketing activities on behalf of an EU AIFM will need to be authorised as an investment firm, a credit institution, a UCITS management company or an AIFM (in each case, under applicable EU laws), or act as a tied agent in accordance with Directive 2014/65/EU (MiFID II).

• Required “facilities”: UCITS intending to market their units to investors in other EU Member States or AIFM intending to market units or shares in AIFs to retail investors in other EU Member States are required to provide investors in each such EU Member State with certain services (so-called “facilities”). In contrast to the previous legal situation, a UCITS or an AIFM marketing its units or shares to Austrian investors is no longer required to designate a local credit institution as paying agent (Zahlstelle). Rather, such “facilities” may be provided online (via a website) and may be performed by the AIFM/UCITS itself or by a third party. While enhancing geographical flexibility by eliminating the requirement of a local physical presence, the Act has broadened the scope of the “facilities” to be provided to local investors. Tasks to be performed by such “facilities” include, amongst others, processing subscriptions, repurchase and redemption orders, providing investors with information on how to make such orders, facilitating the handling of information relating to the exercise of investors’ rights as well as acting as a point of contact for communicating with the competent local authority.
• Formalised de-notification procedure: The absence of clear and uniform conditions for the discontinuation of marketing units or shares of a UCITS or an AIF in a host Member State created economic and legal uncertainty for fund managers. To overcome this uncertainty, the Act provides for clear conditions under which the arrangements made for marketing in respect of some or all of the units or shares of a UCITS or an AIF in a host Member State can be de-notified. Those conditions (including a public offer to repurchase or redeem all units or shares held by investors in that EU Member State) are aimed at balancing a fund’s or a fund manager’s ability to terminate marketing arrangements and the interests of investors in such undertakings.
• Strengthening liquidity planning in open-ended real estate funds: Demand for liquidity caused by redemption of shares in an open-ended real estate fund (“OEREF“) can be difficult to meet on time due to the illiquid nature of the fund’s assets. Following the German example, the Act therefore introduces a statutory return period of 12 months for shares in OEREFs, after which they may be redeemed on certain dates specified by the management company (but at least quarterly). This aims to make redemptions from investors more predictable from a liquidity and risk management perspective. To curb speculative trading in shares of an OEREF, the Act further provides for a minimum (continuous) holding period of 12 months. The relevant provisions are set to apply to existing OEREFs as of 1 January 2027. The fund’s terms and conditions may provide for an earlier application of these provisions (but not earlier than 1 January 2023).

Fund managers who undertake any kind of (pre-)marketing activities for AIFs in Austria or other EU Member States, or that engage distributors to (pre-)market AIFs in Austria or other EU Member States, will need to carefully consider whether the new pre-marketing framework requires them to make any changes to their existing (cross-border) distribution arrangements and/or (pre-)marketing materials.

Overall, fund managers are expected to hail the new pre-marketing regime as an improvement over the current patchwork approach across the EU. However, as the implementation of the new pre-marketing regime into Austrian law leaves room for interpretation with respect to, among others, the treatment of pre-marketing activities conducted in Austria by non-EU AIFMs, further regulatory guidance will be highly welcome.

By Michael Schmiedinger, Attorney at Law, and Henri Bellando, Associate, Schoenherr

Schoenherr has advised Palfinger on the reversal of the cross-shareholding structure with the Sany Group.

According to Schoenherr, “Palfinger is the global leader for innovative crane and lifting solutions. Palfinger AG has been listed on the Vienna stock exchange since 1999 and in 2020 achieved revenue of EUR 1.53 billion. The Sany Group is a leader in high-end equipment manufacturing with over 20 R&D centers and manufacturing bases around the world. Sany Heavy Industries is China’s largest and the world’s fifth-largest engineering machinery manufacturer.”

The share sale and purchase agreement between the two companies was signed in December 2021. Schoenherr had also advised Palfinger on the initial implementation of the cross-shareholding structure, in 2014. 

Schoenherr’s team included Partner Robert Bachner, Counsel Sascha Schulz, and Associate Gabriel Ebner.

Schoenherr did not respond to our inquiry on the matter.

Herbst Kinsky has advised AG Capital Managing Directors and Partners Karl Lankmayr and Daniel Jennewein on the structuring of the Austrian Growth Capital Fund.

According to Herbst Kinsky, the Austrian Growth Capital Fund recently announced its successful first closing in the amount of EUR 140 million. The AGCF provides entrepreneurial equity to SMEs in Austria and neighboring countries through majority and minority investments.

According to the firm, “the current capital commitments to AGCF come from a broad base of institutional investors led by Raiffeisen Bank International, which has supported the fund as an anchor investor and together with C-Quadrat Investment Group as initiator from the beginning. The European Investment Fund and Raiffeisen Holding Niederosterreich-Wien were also won as major anchor investors for the AGCF. The other investor base consists of banks, insurance companies, pension and provident funds, family offices, as well as the founding partners of AG Capital, which include the managing directors and the C-Quadrat Investment Group.”

AG Capital is an independent investment company based in Vienna. 

Herbst Kinsky’s team included Attorneys Wolfgang Schwackhofer and Christoph Ludvik.

Herbst Kinsky did not reply to our inquiry on the matter.

Binder Groesswang, working with Clifford Chance’s German office, has advised BNP Paribas Personal Finance on the reorganization of the European financing landscape of automaker and mobility provider Stellantis N.V.

Credit Agricole Consumer Finance and Santander Consumer Finance were also involved in the restructuring process. The transactions are expected to close in the first half of 2023.

According to Binder Groesswang, the objective of the restructuring is to “reshape the future of mobility as a service and to provide uniform and attractive financing offers to all customers, dealers, and distribution partners of the Stellantis brand. Stellantis intends to organize its financing activities through joint ventures set up with BNP Paribas Personal Finance in different countries to manage the financing activities for all Stellantis brands. BNP Paribas is to become the exclusive partner of Stellantis for the financing activities, in particular in Germany, Austria, and the United Kingdom.”

Binder Groesswang’s team included Partners Thomas Schirmer, Horst Lukanec, and Stephan Heckenthaler, Counsel Stefan Frank, Attorneys Mona Holzgruber, Moritz Salzgeber, and Johannes Bammer, and Associates Michael Mittermair, Andreas Perkonig, and Adam Weicheng Wu.

Binder Groesswang has advised Raiffeisen Property Holding International on the sale of a fully rented office property in Vienna as part of a share deal to the open-ended real estate fund Swiss Life Ref European Real Estate Living & Working.

The parties agreed not to disclose the purchase price.

Raiffeisen Property Holding International is the real estate competence center of Raiffeisen Bank International AG, of which the company is a 100% subsidiary. RPHI develops, manages, operates, and exploits real estate in Austria and the CEE region. 

According to Binder Groesswang, “the eight-story office property with a total of approximately 12,000 square meters and a parking garage is located in a well-connected location in Vienna’s 14th district in Linzer Strasse and is fully rented to Allianz Elementar Versicherung.”

Binder Groesswang’s team included Partners Markus Uitz and Christian Wimpissinger and Attorney Michael Delitz.

Binder Groesswang could not provide additional information on the deal.