Private Equity 2020

Last Updated August 19, 2020


Trends and Developments


Machas & Partners Law Firm is an independent, full-service corporate and commercial law firm with a strong presence in Greece, consisting of five partners and ten associates. The firm has extensive activity in the field of private equity, mergers and acquisitions, advising on cross-border structuring of acquisitions and assisting in the financing of such acquisitions, including syndicated and bond loans. The firm is currently advising the Hellenic Republic Asset Development Fund on the sale of the Hellinikon Project (the former Athens International Airport), the total investment value of which exceeds EUR10 billion. The firm has also acted as legal adviser to a foreign equity fund for the purchase of 75% of Greece’s largest systemic insurance company, the value of which was set at approximately EUR700 million. The firm also successfully completed two substantial private equity deals in the first semester of 2020 in the pesticides and beverage industries respectively.

Introduction to Greece

Greece has experienced an unprecedented acceleration of reforms whilst the consolidation of the banking sector has been driving the country’s growth. Greek banks are accelerating the process of removing NPEs from their balance sheets. In 2019, systemic banks sold a majority of their portfolios of non-performing loans to international funds to the tune of EUR52.8 billion. The reduction in non-performing loans, including securitisations and carve-outs, is estimated at EUR52.8 billion by 2020.

The corporate tax has already dropped from 28% to 24% and the government is planning on slashing the corporate tax rate to the unprecedented rate of 20%. Dividend withholding tax dropped from 15% to 10% in 2019 and from 10% to 5% in 2020. Real Estate Investment Companies that are driving Greece’s real estate boom are not subject to corporate tax but to an annual net asset value tax (ie, an annual tax that is calculated on the basis of the REIC’s net asset value), which dropped from 0.875% to 0.125%. Private equity interests in the real estate sector is strong also on the back of the reduction of the annual real estate tax by 22%, while investments in tourism and short-term rentals are continuously growing. These tax rates are expected to support the business environment and boost private equity investment interest.

The State is also in the process of reorganising and modernising its operational structures. From 2016 onwards, the Greek government has seen continuous public budget primary surpluses while international rating agencies have upgraded Greece to an investment grade. The Greek State has successfully raised EUR11.5 billion from the bond market and holds public debt with an average maturity of almost 21 years, which is 2.7 times longer than that of similar European countries.

Deal Movements in Greece 2019

Greek companies attracted in total EUR12 billion in 2019. The deal landscape in 2019 is characterised by strong cross sectorial investment activity with no particular sector dominating in the Greek market. Inbound transactions represent roughly 50% of the total transaction value. Privatisation proceeds in 2019 were driven by the extension of the concession agreement of Athens International Airport for 20 years, for a total consideration of EUR1.1 billion. In 2019, the trend of micro (

The average deal value of outbound transactions stood at EUR72 million in 2019, up by EUR41 million compared to 2018, reflecting the outward orientation of the investment activity. In total, for the period 2008-2019, outbound transactions represent 13% of the total number of transactions Inbound transactions represent in total the bulk of the market (46%) and they have the highest average size. Domestic transactions, that represented 73% in 2010, recorded a significant decline, currently accounting for 41% of the total. In 2019, domestic transactions were on average small and driven by Greek capital, while inbound and outbound transactions were significantly higher.

Systemic banks are in the process of completing the disinvestment plans of their subsidiaries. Greek banks continued their disinvestment activity in 2019, which was however lower in intensity compared to 2018. Nevertheless, there is a significant disinvestment motion in progress for 2020, with the National Bank of Greece, the country’s largest bank, displaying the most active portfolio.

Deals rose by 43% compared to 2018, whereas «forced» deals declined by 21%. Forced deals, such as disposals of non-core assets, privatisations, as well as distressed deals, are no longer the market driver.

The year 2019 was characterised by a significant shift of Greek companies in the bond market, as a result of steadily reduced interest rates in Europe. The bonds of Hellenic Petroleum, the Greek Telecommunications Company, Mytilineos, Crystal Almond Sarl, Ellaktor and Coca Cola HBC are internationally traded, while those of Terna, Aegean, Attica Holdings and MLS are traded on the Athens Stock Exchange. During 2019, EUR5 billion was raised through the trade of corporate bonds, with coupons ranging from 0.87% to 4.25%, compared to EUR635 million in 2018.

Deals that have already been agreed and will be completed in 2020 could exceed EUR3.3 billion, in addition of around EUR1.6 billion from privatisations. In particular:

Financial services

The disposal of non-core assets by systemic banks are continuing in 2020 with the sales of National Bank of Greece’s and Eurobank’s subsidiaries (including Greece’s oldest and largest systemic insurance company, Ethniki Insurance) while the sale of Ypsilon Capital by Attica Bank has already been concluded and the acquisition of Praxia Bank by Viva is awaiting approval from the Bank of Greece. The total value of this sector’s deals is estimated to exceed EUR1 billion.


The acquisitions of Senfluga, AEM Energy Systems, Photovoltaika Paliomylos, and K-Wind Kitheronas have already been completed. As concerns the sales of Edison, Kozilio 1 and 2 (of Juwi Hellas SA) and a portfolio of Mytilineos photovoltaic power plants it is estimated that they will conclude within the year. The total estimated value of the deals will be over EUR1 billion.


By the start of 2020 the acquisition of the remaining 49,.9% of Alpha Media has been approved while Vodafone Hellas and Wind Hellas are planning to sell a co-owned subsidiary. This sector’s deals are estimated at over EUR805 million.


In 2020, the sales of both Arivia to Upfield Holdings BV and Kliafas have been officially announced. It is also expected that the sale of Luksja to a Greek equity group, which is subject to the Polish Competition Committee, and the complete acquisition of Karatzis by AntKar will proceed within the year. The total estimated value for the deals exceeds EUR285 million.


The sales of Excelsior Belgrade and Catering Touring Enterprises to Lampsa is expected to be completed within 2020, while the acquisition of Cyan Group of Hotels by Henderson Park and Hines has been completed.


The total privatisation proceeds for 2020 are estimated at EUR1.6 billion, as it is expected that the sales of the Greek ITPO, Greek Public Gas Company, North Afandou property, Marina of Chios, Marina of Alimos, etc, have already commenced.

Distressed deals

The sales of the Greek Public Gas Company, the Greek ITPO Pasal Development to Sterner Stenhus, Notos to M&G Fund and Hartel to Frem are expected to conclude within 2020, while the acquisitions of Forthnet by Alter Ego Mass Media and Creta Farm by Impala are very likely to be completed within the year, for a total consideration of over EUR100 million.

Methods for Acquiring Targets in Greece

There are four major ways for acquiring companies/businesses in Greece:

  • share deals;
  • purchase of underlying assets that do not constitute a business;
  • acquisition of businesses as a going concern; and
  • acquisition of businesses or companies through corporate transformation (eg, mergers, demergers, spin-offs etc).

The most common method for acquisition in Greece is share deals, although it is becoming more common to see hybrid deals whereby private equity investors acquire majority or 100% shareholding in Greek companies while at the same time obliging the seller to carve-out specific assets or businesses from the target company through a sale of asset/business or company transformation. In such cases, the seller acquires the carved-out asset or business which the fund does not want to retain and executes a long-standing agreement for the supply of specific services with the target company. The carving-out can take place either before, at the time of, or following the closing of the share deal. The main reason behind private equity funds requiring the carving-out of specific assets or businesses is that such assets or businesses:

  • may carry ongoing inherent risks (environmental, tax, etc);
  • have a problematic history which the private equity funds do not want to take on as risk;
  • are not profitable and therefore they lower the attractiveness of the target; or
  • are not marketable, as they are difficult to “unload” during the exit strategy. 

Due diligence

A typical private equity buyer in Greece will conduct legal, finance and tax due diligence exercises before deciding to purchase any economic interest in Greece. Depending on the type of activity with which the target is engaged, a technical due diligence exercise may also be advisable. In any event, a full or limited scope due diligence is based on the buyer's risk profile.

Moreover, private equity funds deploy considerable resources in examining the manner in which (and the jurisdiction from which) they will acquire the Greek target in order to optimise both the payment of dividends as well as the capital gains during its exit strategy.

It is becoming more and more popular, especially in larger deals and privatisations, for the parties to opt for a vendor’s due diligence, whereby the seller carries out the due diligence and issues a due diligence report, upon which the private equity fund relies for determining the final purchase price.

Locked-box mechanism

Given that some of the larger deals require a lengthy time for proper due diligence and negotiations, ever more frequently, parties in Greece are using the “Locked Box” mechanism in private equity deals. In this case, the parties provide for a closing adjustment price in the SPA that is calculated upon closing, depending on the profitability or loss making of the target company for the period between the locked box date and the closing date. The use of the Locked Box Mechanism has also led to the introduction of the concept of "leakages" and "permitted leakages".

The use of Locked Box Mechanisms is seen where there is a private auction sale process whereby the seller intends to receive and compare various bids and is not willing to enter into parallel negotiations.

Acquisition of shares

It is becoming more common in Greek deals for the parties to sign a Share Purchase Agreement with specific Conditions Precedent following the satisfaction of which (and usually within a predetermined period of time of no more than five days) the parties assume the obligation to sign a Share Transfer Instrument required for the actual transfer of the shares to the Private Equity Fund. CPs are usually provided in cases where approvals by authorities are required (eg, anti-trust, regulatory, etc), a condition that is becoming more and more frequent. It is also common for the SPA to be governed by a different law than the STI. The STI is always governed by Greek Law whereas, the SPA, as a purely contractual agreement, may be governed by any law selected by the parties.

The use of a separate SPA and an STI is also popular because the parties usually wish to keep their underlying agreements in the SPA undisclosed. The parties often disclose the STI to authorities, which contain all pertinent information regarding the transaction to justify the acquisition of the shares (for the buyer) and the source of funds (for the seller).

The use of the concept of a “break fee” is gaining momentum in the event one of the parties does not sign the STI in breach of the SPA.

The acquisition of shares according to Greek Law requires:

  • the signing of the STI;
  • the endorsement of the share certificate that incorporates the share being sold (if such exists); and
  • the registration of the sale of shares in the company’s shareholders book which must be signed by the buyer and the seller.

The completion of the transaction, according to Greek law, does not require the registration of the sale of the shares with Greece’s Commercial Registry nor does the transfer of the sale of shares require a Director’s resolution. However, if the Articles of Association so provide, an approval of the General Meeting of Shareholders may be required.

Notwithstanding the above, it should be noted that Greece has enacted legislation transposing European Union (EU) Directive 2015/849, whereby UBO registries are in operation, where shareholders possessing a shareholding above 25% are recorded in the UBO registry and such information is publicly available.

Shareholders' agreement

In private equity deals where the fund does not acquire all 100% shareholding of the target company, it is now common for the seller and the buyer to enter into a shareholders' agreement that governs their relationship in a host of matters. The most common issues governed by SHAs are reasonable and customary governance terms and protective provisions to address key considerations of each shareholder number of Board of Directors seats each shareholder would receive, reserved matters of the BoD, management of the company, accounting and auditing matters, financing of the company, salaries and bonuses to be received by the company’s management for services rendered, possible preferential distribution of dividend to the private equity investor, agreement on a specific dividend policy, standard representation and warranty provisions, restrictions on the transfer of shares in the company (ie, Lock Up Period, Rights of First Refusal, Tag Along Rights, Drag Along Rights), non-competition and non-solicitation matters, and other related business and operational matters.

Structure of management incentive schemes

Private equity deals typically contain special arrangements with the seller and the key management team who are provided with management incentive schemes which include bonus and stock option plans.

The most common bonuses are productivity bonuses usually consisting of a base rate coupled with a variable rate that is specifically tied to overall sales, profitability and the satisfaction of specific milestones provided in pre-agreed business plans. Under Greek law, if bonuses are regularly paid, they constitute part of the employee’s regular remuneration and are taken into consideration for severance calculations. If bonuses are paid at the employer’s discretion and without prejudice, they constitute discretionary benefits.

It should be noted that the concept of employee share participation schemes exists in Greek Company law, but only for companies that have the form of a société anonyme. The maximum number of shares to be issued under a stock option plan may not exceed one tenth of the existing shares of the company. The terms of the stock option plan, including the price of shares on the grant of the option, conditions of vesting, the percentage of shares to be granted and the categories of employees that may participate in the plan are determined by the General Meeting of the Shareholders.

Non-compete clauses

Non-compete restrictions are very common. Nevertheless, the validity of these restrictive covenants can be challenged under the principle of good faith. Accordingly, non-compete covenants are valid only if the buyer can establish that it has a legitimate business interest that it is seeking to protect (legitimate business interests include trade secrets and confidential information, and trade connections such as customers or suppliers) or that the restriction does restrict the professional advancement of the person in an unfair way, meaning that the binding nature of the clause cannot affect disproportionally the economic and personal freedom of the person for the purposes of protecting the target company’s or buyer’s legitimate business interests as well as the duration and the geographical scope of the restriction is limited. Usually the non-compete clauses for employees should not exceed one year, whilst for sellers, they should not exceed three years.

Debt finance capital structures

The main sources of debt, other than shareholder loans, are loans and credit facilities provided by Greek banks (short- and long-term facilities including revolving credit facilities, term loans, standby letters of credit, bank guarantees and factoring facilities). Gaining in popularity in the Greek debt market, especially as of 2018, are bond loans issued according to Article 14 of Law 3156/2003 and Law 4548/2018, which contain certain tax exemptions applicable to bond loans. This is why most term loan facilities are structured as bond loan facilities.

A condition for a bond loan is that the issuer must be in the form of a société anonyme. Bonds issued under a Greek bond loan are debt securities, which can be subscribed by private placement (ie, the vast majority) or through a public offering. Large Greek corporates though have issued bonds, which are traded on European stock exchanges (mainly Ireland and Luxembourg) and the Athens Stock Exchange.

Notwithstanding the above, it should be noted that small and medium sized enterprises have access to capital provided by different types of EU programs, private funds and special Greek Government projects. Moreover, and in particular, the European Investment Bank, the European Investment Fund, the European Bank for Reconstruction and Development and the International Finance Corporation have been active in the Greek corporate lending market, providing either direct loans to Greek corporates or loans and guarantees to Greek credit institutions.


Greek Competition Law applies to concentrations that meet certain thresholds as per Regulation (EC) 139/2004 on the control of concentrations between undertakings (Merger Regulation). In particular, a concentration occurs where a change of control on a lasting basis results from either any merger between two or more previously independent undertakings or parts of undertakings or an acquisition, by one or more persons already controlling at least one undertaking (or by one or more undertakings), of direct or indirect control of the whole or part of one or more undertakings, whether by purchase of securities or assets, by contract or by any other means.

A concentration must be notified to the Hellenic Competition Commission (HCC) before its completion if both the participating undertakings have a total worldwide turnover of at least EUR150 million and each of at least two participating undertakings has a total turnover of at least EUR15 million in Greece.

Concentrations that are subject to pre-merger notification must be notified to the HCC within 30 days from concluding the relevant agreement, announcing a public bid or assuming the obligation to acquire a controlling interest. It should be noted that the HCC may provide non-binding oral informal guidance. A concentration subject to notification cannot be implemented until the HCC issues its decision on the concentration.

Consultation and transfer of employees

In the event of a sale of business as a going concern, which entails a transfer of employees (forming part of the transferred business), employees are automatically transferred with the business according to Presidential Decree 178/2002 which safeguards employees' rights in the event of transfers of undertakings, businesses or parts of businesses. The employees who work for the business being transferred do not have the right to object to the transfer provided that there is no change in the terms of their employment. However, the transferor and transferee must inform the representatives of the employees that are affected by the transfer (or all the employees where no representatives exist) before the transfer is effected.

The employees must be informed of the date or proposed date of the transfer, the reasons for the transfer, the legal, economic and social implications of the transfer for employees and any measures envisaged in relation to the employees.

In addition, where the transferor or transferee envisages measures which will result in material changes in the conditions of employment, it must consult with the employees' representatives in due time in order for the parties to reach a mutual agreement on the measures.

Statute of limitation

The statute of limitation for buyers' (the Private Equity’s) rights is two years for movable assets and five years for immovable assets. In case of a sale of business as a going concern, the statute of limitation is two years, unless there is a sale of an immovable asset, in which case the statute of limitation is five years. Notwithstanding the above, the parties may contractually agree for a longer period of statute limitation.

Withholding on outward-bound payments (domestic law)

The Greek Income Tax Code provides for Greek withholding taxes on income arising from:

  • dividend distributed by the Greek target company at a rate of 5%;
  • capital gains from the sale of shares in the Greek target company at a rate of 15%;
  • interest charged to the Greek target company at a rate of 15%; and
  • royalties charged to the Greek target company at a rate of 20%.

The above withholding taxes may be reduced or eliminated according to the provisions of available double tax treaties or within the framework of EU Directives. This is why it is important for private equity funds to carry out proper tax due diligence and structure their investments accordingly. 

As regards intra-group dividends, a broad tax exemption is provided under certain conditions. Specifically, there is no Greek withholding tax on dividends if the private equity fund (which must be a tax resident of an EU Member State) holds at least 10% of the share capital or voting rights of the Greek target company for a period of least 24 months (although the exemption may be provided prior to the completion of 24 months secured by a guarantee). It should be noted that general anti-abuse rule have been introduced by virtue of which a tax exemption may be alleviated if it is considered that a non-genuine arrangement exists as regards the intra-group structure. A "non-genuine arrangement" is an arrangement that has not been put into place for valid commercial reasons reflecting the economic reality.

The same exemption from Greek withholding tax applies for payments of interest or royalties between affiliated companies pursuant to EU Directive 2003/49/EC if the EU recipient taxpayer holds at least a minimum participation of 25% of the share capital or voting rights of the Greek target company. The minimum participation percentage should be held for at least 24 months (although the exemption may be provided prior to the completion of 24 months if secured by a guarantee).

Exemption of Greek capital gains tax on the sale of shares in Greece is commonly addressed by selecting that the investment in Greece be made by a private equity fund resident in a country that has signed a double tax treaty with Greece.


Owing to the tax neutrality approached through the entry into force of the GITC, there is no particular vehicle for tax purposes for conducting a business in Greece, unless the activity is that of shipping or real estate and the target company is a Real Estate Investment Company.


Under the GITC, a provision of "business restructurings" has been introduced. In particular the ITC includes provisions on company restructuring and specifically on the contribution of assets in return of shares, exchange of shares, mergers and spin-offs, and transfers of the registered seat of a Societas Europaea. Moreover, a business restructuring should be effected in accordance with the arm's-length principle. Specifically, it is stated that in the case of an intercompany business restructure in either local or cross-border, in which goodwill or intangible assets are transferred or their use is assigned, then such transfer should be performed at a price that will be in compliance with the arm's-length principle.

In addition, the reallocation of risks and functions in the context of this restructuring should be performed in accordance with the arm's-length principle by taking into account other comparable cases.


Once a business moving abroad has fulfilled its tax obligations in Greece, there is no particular exit tax regime regarding movement of the business abroad. It is worth mentioning that the Greek Income Tax Code has introduced most of the provisions in relation to the EU Merger Directive.

Machas & Partners Law Firm

12 Neofytou Douka Street
Kolonaki 106 74

+30 210 721 1100

+30 210 725 4750
Author Business Card

Trends and Development


Machas & Partners Law Firm is an independent, full-service corporate and commercial law firm with a strong presence in Greece, consisting of five partners and ten associates. The firm has extensive activity in the field of private equity, mergers and acquisitions, advising on cross-border structuring of acquisitions and assisting in the financing of such acquisitions, including syndicated and bond loans. The firm is currently advising the Hellenic Republic Asset Development Fund on the sale of the Hellinikon Project (the former Athens International Airport), the total investment value of which exceeds EUR10 billion. The firm has also acted as legal adviser to a foreign equity fund for the purchase of 75% of Greece’s largest systemic insurance company, the value of which was set at approximately EUR700 million. The firm also successfully completed two substantial private equity deals in the first semester of 2020 in the pesticides and beverage industries respectively.

Compare law and practice by selecting locations and topic(s)


Select Topic(s)

loading ...

Please select at least one chapter and one topic to use the compare functionality.