Mergers and Acquisitions Lawyers in Bulgaria

Mergers and acquisitions in Bulgaria are generally regulated by the Commerce Act. In case of public companies in Bulgaria, there are specific rules for mergers and acquisitions included in the Bulgarian Public Offering of Securities Act (POSA). Takeover bids for public companies are regulated according to special conditions. The main goal for company mergers and acquisitions is to create a stronger company that benefits from the combined values of the companies that have unified. 

Below, our mergers and acquisitions lawyers in Bulgaria explain the main regulations for such transactions, as well as, the services we can provide in relation to them.

Services offered by our mergers and acquisitions lawyers in Bulgaria

Before explaining the mechanism behind mergers and acquisitions, here is a short list of the services provided by our Bulgarian law firm:

• establish the client’s business goals;
• set out all the legal issues related to the transaction in accordance with its type;
• advise on negotiations and deals that can be made;
• determine the tax ramifications and whether special structuring is necessary;
• conduct due diligence procedure related to every type of contract the client has;
• assist in the negotiations;
• obtain the necessary permits/approvals from the Bulgarian competent authorities in order to complete the deal.

The team working on merger and acquisition deals is often complex and can include the support of tax and employment attorneys among others. Our Bulgarian mergers and acquisitions lawyers can offer comprehensive assistance in this type of transactions.

The main laws to respect in mergers and acquisitions in Bulgaria

Our mergers and acquisitions lawyers in Bulgaria point out that apart from the Commerce Act, there are also other laws to respect in such deals. Among these, we mention the following:

• the Obligations and Contracts Act, which provides for the performance, validity default, and provision of security in case of contracts;
• the Commercial Register Law, which covers the change in ownership of a company;
• the Public Offering of Securities Act, which applies to public companies in Bulgaria;
• the Competition Protection Law, which provides for obtaining the necessary approval from the Bulgarian Commission on Protection of Competition;
• the Employment Law, which contains specific provisions on the protection of employees in mergers and acquisitions;
• other specific industry-related law such as the Energy Act, the Foods Law and/or the Companies with Special Purposes Act.

Should you need support in such deals, we kindly invite you to discuss all the relevant aspects with our Bulgarian mergers and acquisitions lawyers.

Differences related to the type of company

Investors who are planning to acquire or take over Bulgarian companies should consider the different rules that apply to specific types of companies in Bulgaria.

Transactions that imply company mergers and acquisitions are different for joint-stock companies and for limited liability companies. The main differences apply to the necessary documentation that needs to be prepared for the merger or acquisition and the approvals and registrations required. In Bulgaria, only joint-stock companies can be public or non-public.

Our mergers and acquisitions lawyers in Bulgaria can help you prepare the documentation necessary for company mergers and acquisitions.

Mergers and acquisitions in public companies in Bulgaria

Companies trading their shares on the Stock Exchange are subject to special regulations in terms of mergers and acquisitions in Bulgaria.

The company taking over another business must abide by the mandatory tender offer requirements under the Public Offering of Securities Act and Ordinance 13 of the Financial Supervision Commission (FSC). Depending on the share of the company that will be acquired in the public enterprise, there are various tender offers that are either mandated or voluntary under the Public Offering of Securities Law.

If the acquirer purchases any of the following, it must make a mandatory tender offer to the company’s remaining shareholders:

• higher than 1/3^rd of the company’s votes in the case that no one holds the majority of the company’s votes;
• higher than 50% of the company’s votes;
• higher than 2/3^rds of the company’s votes.

The acquiring company must register the mandatory tender offer with the FSC within 14 days.

A voluntary tender offer may be directed by the acquirer if:

• it obtains more than 90% of the votes in a publicly traded company;
•  it holds at least 5% of the votes in a publicly traded company and intends to obtain more than 33% of the votes.

Before it is published, the FSC must approve the tender offer. The Commission must respond within 20 business days of the submission; otherwise, the tacit approval rule is in effect.

Feel free to address our mergers and acquisitions lawyers in Bulgaria for support in such proceedings.  

Necessary documentation for mergers and acquisitions in Bulgaria

The Commerce Act stipulates that certain types of documents are compulsory for mergers and acquisition transactions in Bulgaria. For mergers and de-mergers a transformation plan is needed, as well as agreements, reports from the management body, reports from auditors and certain certificates of good standing.

A notarized share-purchase agreement and new Articles of Association that reflect the transfer are necessary for the transfer of shares in a Bulgarian limited liability company. The transfer of shares in a joint stock company generally requires less documentation.

Mergers and acquisitions transactions in Bulgaria may take approximately 25 business days or longer, according to the type of company and the necessary approvals and regulations.

The Bulgarian legislation for mergers and acquisitions is investor-friendly and the provisions applicable to Bulgarian investors also apply to foreign investors. Parties involved in a merger or acquisition transactions need to be advised by local legal consultants. Our mergers and acquisitions lawyers in Bulgaria can provide all the necessary legal assistance for mergers and acquisitions.

Our lawyers are also at your disposal if you want to immigrate to Bulgaria. For this purpose, we assist in obtaining temporary or permanent residence permits or citizenship in Bulgaria. Please contact us for more information and advice.