Mergers - Slovenia

Updated 04/2010

Legal requirements

One corporate action to pursue corporate restructuring is the merger & acquisition (takeover) of two or more companies with the aim of improving the company’s performance and competitiveness in the national market and abroad.

There are two forms of consolidating public limited companies – an acquisition (takeover) is the purchase of a smaller company (combination of "unequals") by another in which no new company is formed; a merger is a combination of two companies (combination of "equals") to form a new company – both regulated by the Companies Act.

Companies Act
Council Directive concerning mergers of public limited liability companies

The Companies Act also covers the cross-border mergers of companies with share capital taking into consideration the provisions of the EU Directive on cross-border mergers of companies with share capital .

Directive on cross-border mergers of companies with share capital

Types of Consolidation of Companies

In accordance with the Companies Act, two or more public limited companies may be consolidated by takeover (acquisition ) or by merger.

A Takeover (Acquisition)

The larger company (acquiring company) initiates the takeover which is executed by the transfer of all shares of one or more smaller companies (acquired company) to the larger company (acquiring company).

Keeping the accounts in the case of mergers and acquisitions
Court Register Act

A Merger

A merger involves the mutual decision of two (or more) companies to combine and become one entity, and for this purpose they form a new public limited company; the merger is executed when the total amount of shares of the companies involved is transferred to this new public limited company.

Implementation of Article 48 of the Corporate Income Tax Act

There are two merger & acquisition types: Horizontal and Vertical. A horizontal merger is a merger between two companies of the same branch of industry (which may negatively affect the competitive situation). The expected advantages are to cut costs and increase profits, owing to an increase in the degree of concentration in an industry. A vertical merger & acquisition occurs when a supplier (acquiring company) buys a reseller (acquired company), or vice-versa. The key point is that the two companies are part of the same supply chain.

As a takeover (acquisition) does not necessarily have to be a mutual decision, a larger company can initiate a hostile takeover of a smaller company (target company), if it decides to buy this company in the face of resistance from the smaller company's management. An acquisition is a friendly takeover if the target company's shareholders have approved the decision to be acquired.

Slovenian legislation is friendly to management buyouts

Conditions of mergers & acquisitions (takeovers)

The procedure of the acquisition of companies in Slovenia is regulated by the Takeover Act.

Takeover Act
Change of Corporate Ownership Act

An acquiring company must obtain prior consent issued by The Stock Market Agency and a permit issued by the Competition Protection Office. It should submit:

an application for prior consent;
a 'tender offer' for buying a controlling share of the target-company's stock from its shareholders;
a prospectus for buying the target company's stock;
an application for the conclusion of a Contract for Services with the Securities Clearing Corporation, including services relating to the receipt of the 'tender offer' and activities relating to changes in the share capital of the acquired and the acquiring company;
a report on securities in connection with the 'tender offer', which have been obtained by an offerror in the last 6 months;
an application filed with Competition Protection Office for the issuance of a permit as notification of concentration;
an opinion on the acquisition issued by the management of the target company.
Stock Market Agency
Central Securities Clearing Corporation ("KDD")
Competition Protection Office

Buying an existing company, with an already established structure, can be a good way of expanding your business.

Takeovers — Slovenia

Administrative procedures

Notification

Prior to merger & acquisition (takeover) the authorised auditing company will perform a valuation of assets, to specify the conversion rate.

Registered Auditing Companies

The management of the consolidated companies will conclude an Acquiring Agreement in the form of a notarial deed, and this Agreement will be audited for each company.

Notaries

The Agreement between the Competition Protection Office and the shareholders of companies, stating that the acquisition is not a prohibited takeover, is included in the Acquiring Agreement.

The Office of the Republic of Slovenia for the Protection of Competition

The merged companies must notify the Competition Protection Office of a merger (acquisition), if the total annual turnover of the companies involved during the previous financial year in the Slovenian market, exceeds 35 million EUR, providing that at least two of the companies involved from the group exceed 1 million EUR.

However, the Competition Protection Office may call upon the involved companies to notify their merger (acquisition), even if they did not exceed the stated thresholds, if together with other companies from the group they obtain more than 60 % of the market share in Slovenia.

Form for the notification of concentration of companies [112 KB]

Registration

A proposal for the entry of a takeover in the Court Register, which must include an increase in equity of the acquiring company, should be submitted at the location where the acquiring company has its registered office.

Court Register

The e-VEM Web Portal offers very useful information and the certain forms relating to corporate restructuring.

Decree on the Entry of Companies and other Legal Entities in the Court Register
Informative and useful data for taxation and carrying out a corporate restructuring
eVEM

On the e-administration (e-uprava) Portal and the Court Register website you will find useful information on submitting the basic data of legal entities having changed after the merger (acquisition).

e-uprava
Court Register

Resources

The Company Law Division of the Ministry of the Economy, offers basic information about corporate restructuring.

Company Law Devision
Ministry of the Economy

The Competition Protection Office offers general information on legal limits relating to the merger & acquisition (takeover) of companies.

The Office of the Republic of Slovenia for the Protection of Competition

Information on the annual business results of the companies involved in mergers (acquisitions) is available at The Agency of the Republic of Slovenia for public and legal records and services (AJPES).

AJPES

Information on the tax liabilities of the companies involved in a merger (acquisition) is available from the Tax Administration of the Republic of Slovenia.

Tax Administration

The Public Agency of the Republic of Slovenia for Entrepreneurship and Foreign Investments (JAPTI) also offers useful, general information on corporate restructuring.

JAPTI

Check also the legislation on this topic in:

Mergers - Slovenia