Hungary: Government tightened existing control on foreign investors to take over companies in Hungary
Clearstream Banking1 would like to inform customers that effective
25 May 2020
the Hungarian Government issued Decree 227/2020 that introduces stricter rules on controlling takeover activity targeting Hungarian companies by foreign investors on top of the existing disclosure requirements for the laws on takeovers. Foreign investors will have to apply for a permit to acquire more than 10% of a local company this year in businesses deemed strategically important. The decree will be in effect until the end of 2020 and apply to deals worth more than EUR 1 million in certain sectors listed in the appendix of the decree as follows:
- Chemical and pharmaceutical industry;
- Retail sales;
- Critical manufacturing industries (including electronics, machinery, steel production, vehicles);
- Credit and insurance services;
- Agriculture and food production;
- Government facilities;
- Information technology;
- Nuclear technology;
- Water supply and sewage treatment;
- Waste management;
- Building material industry;
- Transportation and logistics;
- Medical equipment production; and
Foreign investors will need to submit documentation of the proposed deals to the Minister of Innovation and Technology, who will have 45 days to either approve or deny the request.
Impact on customers
Customers should note the changes of the regulations governing the procedures of takeovers.
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.