Overview of the Austrian M&A Market
In 2024, the Austrian M&A market exhibited increasing signs of stabilisation. A total of 245 transactions were announced, re ecting a 7.9% increase compared to the previous year. Despite this rise in deal activity, however, the overall transaction volume declined by 24.2% to EUR5 billion. This suggests that while mergers and acquisitions remained dynamic, the average deal size was signi cantly smaller. In particular, the complete absence of mega-deals in excess of EUR1 billion underscored this trend.
As in many other jurisdictions, numerous macroeconomic factors impacted Austria’s M&A activity in 2024, including geopolitical tensions, high nancing costs and increased regulatory scrutiny. All of this combined created a more complex and challenging investment environment. These elements led to greater caution among investors, resulting in a more selective approach to deal-making and ultimately a ected overall transaction values. Furthermore, longer approval processes and increased due diligence requirements shaped the dynamics of the Austrian M&A market.
The majority of deals occurred in the industrial sector, which recorded the highest number of transactions, totalling 83. The ve largest deals constituted 48% of the aggregate transaction volume, while the remaining 52% was distributed across 240 other M&A transactions. The median transaction volume stood at EUR90 million, while the average transaction volume reached EUR135 million, highlighting a concentration of larger deals within a speci c subset of transactions.
The largest single transaction of 2024 was Cellnex’s sale of the tower business for EUR803 million. The buyers were EDF Invest, MEAG MUNICH ERGO Asset Management GmbH, and Vauban Infrastructure Partners. This deal represented a signi cant milestone in the Austrian M&A market, re ecting a continued investor interest in infrastructure assets.
Austrian market participants’ activity declined in the second half of 2024, both in terms of the number of transactions and overall transaction volume. This slowdown suggests a more cautious approach among investors, potentially in uenced by macroeconomic uncertainties, tighter nancing conditions, and regulatory developments.
Strategic investors
Strategic investors continued to dominate Austria’s M&A landscape in 2024, accounting for approximately 90% of all transactions, with a total of 220 deals. This trend highlights the ongoing focus on acquisitions driven by longterm business objectives, including market expansion, technological
innovation and the pursuit of operational synergies. The strong presence of strategic buyers underlines their commitment to sustainable growth and value creation despite evolving market conditions.
Financial investors, including private equity and venture capital, slightly increased their activity in 2024, with the number of deals rising from 15 to 25. Despite this growth, nancial investors still accounted for only 10% of total transactions, reinforcing the dominance of strategic players in Austria’s M&A market.
Strategic investors are expected to maintain their dominance in 2025, particularly in industries undergoing digitalisation and sustainability transformations. If nancing conditions improve, private equity investors may gain a stronger foothold and increase their share of transactions.
Sector dominance in the lastyear
In 2024, Austria’s industrial sector led the market in terms of transaction volume, with 83 deals. It was closely followed by the technology sector, which recorded 70 transactions. The real estate sector ranked third with 30 deals. In terms of transaction values, the telecommunications, media and technology (TMT) sector led the Austrian M&A market in 2024, with a total of EUR1.5 billion. The industrial sector came in at a close second, with a transaction value of EUR1.3 billion. These gures highlight the ongoing signi cance of both sectors in shaping Austria’s M&A landscape.
The emphasis on the industrial and technology sectors aligns with global trends focusing on digital transformation and innovation. Companies in these sectors actively pursue acquisitions to strengthen their technological capabilities and maintain competitiveness in a global market.
In 2025, technology investments are expected to rise, with particular emphasis on arti cial intelligence (AI) and digital infrastructure. Furthermore, the healthcare sector is poised for increased M&A activity, driven by Austria’s growing prominence as a biotech and MedTech hub.
The largest foreign players in the Austrian M&A market in 2024 were predominantly German investors, who accounted for 28% of all acquisitions. In addition, 45.8% of takeovers were carried out by investors from other European countries, including France, Belgium and Sweden. As a result, a total of 73.8% of all foreign investors in Austria were based in Europe. On the ip side, 26.7% of outbound transactions were directed towards Germany, followed by 22.5% aimed at North America. This highlights Austria’s strong ties to its European neighbours and key international markets.
The one-year anniversary ofthe Flexible CapitalCompany
As of 1 January 2024, Austria introduced a new corporate legal form: the Flexible Capital Company (FlexCo). The newly created FlexCo o ers signi cant improvements for entrepreneurs and start-ups by reducing bureaucratic hurdles and introducing tax incentives for employee participation. In the rst year since its introduction, more than 800 FlexCos have been established.
The law governing the Flexible Company is largely based on the Limited Liability Company Act (GmbH). However, compared to a GmbH, FlexCo shareholders enjoy greater exibility and design freedom. Formal requirements have been eased, particularly regarding the transfer of shares. Instead of a notarial deed, a private deed drawn up by a notary or lawyer is su cient for the share transfer. Resolutions by circulation can also be passed without the individual consent of all shareholders if the articles of association contain such a provision. Shareholders may also exercise the voting rights associated with a share in a non-uniform manner. This is particularly important for trust structures.
In addition, a special class of corporate value shares (enterprise value shares) has been introduced for employee participation programs. These enterprisevalue shares can comprise up to 25% of the share capital. These enterprise value shares have no voting rights but include a right to participate in the company’s balance sheet pro t and liquidation proceeds.
The option of non-voting corporate value shares is an important tool to attract highly skilled professionals. The new tax model for employee participation also o ers signi cant practical advantages: There is no taxation or valuation at the time of share allocation; taxation only occurs upon sale, following a at-rate model.
The FlexCo also enables exible capital measures that were previously only available to joint-stock companies, such as conditional capital increases and authorised capital. Moreover, the minimum share capital for both GmbHs and FlexCos has been uniformly reduced to EUR10,000, making company formation more accessible to a broader range of entrepreneurs.
However, one of the drawbacks of the new FlexCo is that the obligation to have a supervisory board applies at an earlier stage than traditional GmbHs. A FlexCo is obliged by law to establish a supervisory board if it exceeds two out of three of the following characteristics:
EUR5 million balance sheet total;
EUR10 million in annual turnover; or more than 50 employees on an annual average.
In contrast, a GmbH only needs a supervisory board if its share capital exceeds EUR70,000, the number of shareholders exceeds 50, or the average number of employees exceeds 300.
Overall, the FlexCo is proving to be a success story and is becoming increasingly popular with both investors and founders.
Recent Legal Changes
Start-Up Promotion Act
The Start-Up Promotion Act, which came into force on 1 January 2024, introduced tax incentives for employee participation in start-ups to increase employee loyalty and, in particular, address the so-called “dry income problem.” The dry income problem has arisen in cases where start-ups and young SMEs lacked liquidity and were, therefore, unable to provide monetary compensation for highly quali ed employees. When this was compensated by granting equity shares, immediate taxation resulted in an additional liquidity burden for the recipients, thus creating the dry income problem.
Under the new regulations, employees who acquire shares in a company within ten years of its founding – provided the company is of limited size (a maximum of 100 employees or annual revenue of up to EUR40 million, with no corporate a liation) – can opt for special tax treatment. These shares must be transferable only with the employer’s consent (restricted transferability) and may be received either free of charge or for a maximum consideration equal to their nominal value.
This special tax treatment means that the shares are only considered as received at the time they are sold or in certain other special cases, such as a transfer back to the employer, termination of the employment relationship or the removal of the transfer restriction. Additionally, 75% of the income from the sale of the shares can be taxed as other compensation at a xed tax rate of 27.5%, provided that the employment relationship has lasted for at least two years and the receipt occurs at least three years after the initial issuance of the start-up employee participation to the employee.
Corporate Digitalisation Act 2023(GesDigG2023)
The Corporate Digitalisation Act 2023 (“Digitalisation Act”) was enacted in Austria to implement Article 13i of EU Directive 2019/1151 to prevent individuals convicted of certain economic crimes from holding executive positions in capital companies.
Key features of the Digitalisation Act 2023 are the following:
Disquali cation due to criminalconvictions: Individuals who have been convicted of speci c economic o ences (eg, embezzlement, tax fraud) and sentenced to more than six months of imprisonment are automatically disquali ed from serving as managing directors or board members for three years.
A ectedpositions: The disquali cation applies to managing directors of limited liability companies and board members of stock corporations and co-operatives.
Automatic exclusion and resignation obligation: Once a conviction becomes nal, disquali cation takes e ect automatically. Existing executives must resign within 14 days. If they fail to do so, they will be removed from the Commercial Register by court order. However, acts of representation carried out by the disquali ed authorised representative body remain e ective.
EU-Wide information exchange: Austria’s Commercial Register Court can request information through the Business Registers Interconnection System (BRIS) to verify if an individual is disquali ed in another EU or EEA country. Similarly, Austria must respond to inquiries from other member states.
This law enhances corporate integrity and transparency by ensuring that individuals with relevant criminal records cannot hold key leadership roles in Austrian capital companies.
Grace PeriodAct
The Grace Period Act was introduced in Austria to facilitate the transfer of businesses within families while increasing legal and planning security for successors. It allows natural persons to make an “accompanied business transfer” if they intend to transfer their business or company shares to relatives. The transferring person must declare in an application to the tax authorities that the business or company shares shall be transferred to one or more bene ciary relatives within two years of submitting the respective application.
As part of this process, a tax audit will be initiated for previously unexamined periods. The aim is to identify and minimise potential tax risks at an early stage.
Additionally, the law introduces simpli cations in trade law, such as the electronic validation of company register entries during business registration. It also includes adjustments to labour protection laws, such as extended deadlines for certain reporting requirements following a business transfer.
A draft pending review for the issuance of a Corporate Leadership Positions Act, as proposed by the Austrian Federal Ministry of Justice, aims to implement EU Directive (EU) 2022/2381, which mandates gender-balanced representation in the leadership bodies of listed companies.
Key Provisions of the CLPA draft include the following.
In listed companies, the supervisory board must consist of at least 40% women and at least 40% men.
If the management board of a listed company consists of more than two persons, it must include at least one woman. (This requirement goes beyond the EU directive, aiming to improve the historically low representation of women in executive positions.)
If the gender quota is not met, the appointment of supervisory board members is invalid (“empty seat rule”). Executive board members appointed in violation of the quota will not be registered in the company register.
Rising numbers ofinsolvencies
According to a study by the Austrian creditor’s protection association (KSV 1870), in 2024, a total of 6,587 companies in Austria had to le for insolvency, averaging 18 corporate bankruptcies per day. The main drivers of insolvency are the trade sector, the construction industry and the hospitality sector. In addition, there were 86 major insolvencies with liabilities exceeding EUR10 million. By comparison, there were only 44 such cases in 2023.
Not only but also due to the high number of major insolvencies, total liabilities have increased by 35% compared to 2023, reaching a total of EUR 18.9 billion – starting from an already very high level.
Furthermore, 50,300 creditors (+10% compared to 2023) and 29,600 employees (+25% compared to 2023) are a ected.
For most a ected companies, energy, raw material, and personnel costs are major problem areas, which they have often been unable to pass on to buyers or only to a limited extent. It is also striking that many of the insolvency cases involve a large number of creditors (100 or more). As a result, these insolvencies also impact other businesses and their partners, increasing the risk of further insolvencies. Additionally, a shortage of skilled workers and the declining order volume are causing di culties. Furthermore, overall export demand in Austria and Europe is progressing slowly.
The largest insolvencyofthe year2024was recorded byFiskerGmbH,with liabilitiesamounting toEUR3.79billion. It isfollowedbyentrepreneur René Benko(EUR2.43 billion) and the BenkoFamily PrivateFoundation(EUR2.28 billion). Recently ling for insolvency,KTM AGranks fourthwith liabilitiesof EUR1.82 billion. Meanwhile,Leiner & kikaMöbelhandels GmbH, which went bankrupt for the second timein two years, falls outside the top tenlargest insolvenciesofthe year withEUR139million inliabilities.
For 2025, KSV 1870expects between6,500and 7,000 corporate insolvencies. Economic researcherspredict lowgrowth, butGermany– Austria’smost important trading partner– is likelytoremainin a di cult situation,and there areno signs ofa signi cant easing in cost pressures. Additionally, factorssuch asenergy costs, consumerdemand, and geopolitical developments will continuetohavea majorimpacton businesses’ economic situationand, consequently, on insolvencytrends in thecoming year.
Lookingto theFuture
The AustrianM&Amarket in 2025 is poisedfor continued strategic growth despiteeconomic and geopolitical uncertainties. M&ATransactions may increase,especiallyduetoanuptick in distressed M&A. Factorssuchas anticipated interest ratereductions and policy shifts in key global markets could also driveincreasedinvestmentactivity.
The industrialand technology sectorsare expectedtomaintain leadershipin M&Atransactions, supported bysustainability and digitalisation initiatives. Privateequityactivitymay expand if capital costsdecrease,andcross-border transactions could rise as rmsseek internationalgrowthopportunities. Furthermore, a surgein divestitureand carve-outsis expectedas companies optimise their portfoliosamid economicchallenges.
Insummary,Austria’s M&Amarket remains dynamic and adaptable,with strategic investmentsin key industries shapingitstrajectory in 2025. While macroeconomic pressurespersist, sectorssuch asindustrials,technology and healthcareare settodrive futuredeal activity.
