Austria: A Corporate/M&A Overview

Austria’s Economic and Business Strengths

Located in central Europe with a population of approximately nine million, Austria is a modern market economy with a strategic location and a highly skilled labour force. Austria boasts a robust economy characterised by a high GDP per capita according to the OECD, low unemployment rates and a strong industrial base. Key industries include manufacturing, software, services and tourism, but in recent years the country has also seen a growing number of cutting-edge technology companies and other players in R&D heavy industries. The capital of Austria, Vienna, is a major financial centre for the CEE region and hosts, in its vicinity, numerous international corporations and financial institutions. Besides the Vienna metropolitan region, many hidden “champions” are based in different areas of the country, such as Styria, Upper Austria, Tyrol or Vorarlberg. Key advantages of Austria as a business hub are its infrastructure, its high social security and the quality of its education system. Due to its geographical position and proximity to expanding markets in Eastern Europe and the Balkans, Austria is an interesting location for many companies that are active in the CEE region and want to make use of its historically good relations with many countries in the wider area. Due to the relatively low corporate tax rate of 23% and the participation exemption, Austria not only offers a stable political environment, but also attractive tax conditions for investors and companies.

The M&A Market in 2025

The Austrian M&A market showed a mixed picture in 2025. While the recorded transactions only represent a small sub-section of the market, a recent study showed a total of 118 transactions involving Austrian parties, marking a 4.8% decline compared to the same period in 2024. At the same time, transaction volume in the sub-set of deals represented in the study soared to EUR17.3 billion, more than seven times the 2024 figure. The surge is primarily driven by two large deals: Erste Group’s EUR7 billion acquisition of Santander Poland and the contribution of Borealis, Borouge, and Nova Chemicals by OMV and ADNOC to an EUR8.9 billion joint venture. (EY Österreich M&A-Index 2025; in German). According to the same study, strategic investors continue to dominate the market in Austria: 109 of 118 recorded deals were strategic, while private equity and venture capital accounted for only nine transactions, highlighting their limited role. Cross-border activity remains significant, with outbound transactions by Austrian companies totaling over EUR16 billion – driven by the two deals mentioned above – while inbound deals amounted to EUR900 million. The industrial sector led the Austrian M&A Market in terms of transaction numbers, with 34 deals, followed by TMT and consumer products and retail, each with 22 deals. In terms of deal volume, life sciences and chemicals accounted for the largest share with EUR8.9 billion, followed by financial services at EUR7.1 billion. Generally, the figures in the study should be treated with caution as there are many private deals that are not considered in the study, such as different significant carve-out transactions, distressed sales or other transactions with non-public figures (in particular in the sensitive energy and infrastructure sector). Noteworthy transactions that are not covered by the study include the acquisition of ImWind by Wien Energie or Styria Media Group’s partnership with Sprints to acquire Adevinta’s shares in willhaben.

Key Legal Developments

To highlight just a few examples, the following legal developments had an impact on M&A transactions in Austria in 2025.

Surge in distressed M&A – corporate insolvencies reach historic levels

Austria’s corporate landscape continues to be shaped by a pronounced surge in distressed assets and insolvency proceedings, creating an active environment for distressed M&A. According to data published by an Austrian creditors’ protection association (KSV1870), almost 7,000 companies filed for insolvency in Austria in 2025, marking another increase of more than 3% compared to 2024. Certain areas were particularly affected, including the retail, automotive (and automotive supply), construction and real estate industries, with the latter driven in part by further fallout from the insolvencies of the SIGNA and the SÜBA Group. Against this backdrop, distressed M&A is becoming an increasingly prominent feature of the Austrian transaction market, with opportunistic investors showing greater interest in turnaround scenarios and special situations, particularly in real estate, retail and construction, where restructuring needs and asset repricing are opening up new investment avenues.

Increased focus on the defence and healthcare sectors

Due to a continued surge in global crises (such as in the Ukraine or Middle East) and the current US–EU geopolitical situation characterised by high structural dependency, particularly in defence and digitalisation, the defence sector in Europe (and Austria) is experiencing particularly strong growth. This also impacts sectors with a potential for dual-use cases, such as adjacent security and aerospace industries as well as infrastructure. Geopolitical uncertainty has led to increased due diligence requirements, with a focus on defence-specific risks, such as export compliance and trade controls, security clearances and personnel and supply chain risks that require detailed analysis of the procurement structure in cross-border transactions. In addition, greater caution in sensitive sectors (eg, defence-related tech, critical infrastructure, companies relying on complex supply chains, or high-tariff sales markets) can be observed. Besides the defence sector, the healthcare and life sciences sectors continue to expand significantly, driven by innovation and increasing cross-border activity.

Digital infrastructure assets

IT and digital infrastructure assets, mainly fibre optics, data centres and towers, have attracted significant interest in the Austrian M&A market over recent years, including by real estate and private equity investors. For example, M&A activity in the digital infrastructure sector has been growing year-on-year in Austria, with deal counts and cumulative deal values highlighting the resilience of this asset class. The sector is also influenced by the ongoing demand for data sovereignty and a multitude of European and national regulations (such as the European Energy Efficiency Directive, among others). In this context, in particular the enactment of the Network and Information Systems Security Act 2026 (NISG 2026) in late 2025 has further intensified the regulatory landscape, as crucial entities in sectors such as IT, digital infrastructure and digital services are now subject to a comprehensive cybersecurity and “all-hazards” risk management regime, which will be fully enforceable as of 1 October 2026. This framework is complemented by the Resilience of Critical Entities Act (RKEG), requiring affected entities to adopt enhanced resilience measures, carry out regular risk assessments and comply with extensive reporting obligations.

The Austrian flexco

Since its introduction in 2024, the Austrian flexible company (“FlexCo”) has gradually established itself as a recognised legal form in the country. Its enhanced structural flexibility makes it particularly attractive for start-ups and scale-ups, especially given its ability to implement employee participation schemes through the issuance of company value shares. Nevertheless, despite these advantages, the FlexCo has yet to achieve significant adoption in the Austrian M&A market.

Reform of real estate transfer tax (RETT)

Austria’s revised real estate transfer tax (RETT) regime came into effect on 1 July 2025, introducing far-reaching changes that will significantly impact transactions involving real estate companies and companies holding substantial real estate assets. The core element of the reform is the reduction of the ownership threshold for RETT-triggering share deals from 95% to 75%. In particular, the following essential changes must be considered: For acquisitions of shares in the direct real estate-holding company by new shareholders, the relevant observation period is extended from five to seven years. As a result, staggered share acquisitions can now also trigger RETT liability.

Entirely new in Austria, for multi-tier corporate structures, is the concept of an “indirect” unification of shares in one hand or in the hands of an acquiring group. A look-through approach applies, using multiplicative tracing of ownership interests across several levels.

For the first time, the law defines “real estate companies” as entities whose activities consist essentially of the sale, letting or management of real property. Transactions involving such companies are now subject to RETT at a rate of 3.5% of the fair market value of the real estate.

Many legacy structures designed to remain below the 95% threshold may now lose their effectiveness under the new 75% rule.

FDI

In the past years, there has been an ever-increasing number of transactions that are subject to the Austrian FDI regime. The Austrian Investment Control Act (Investitionskontrollgesetz) identifies several critical sectors in which transactions involving certain foreign investors require an FDI filing, including not only areas like defence and security, but (amongst others) also energy, IT, transport and health and digital infrastructure. Navigating the respective regulatory uncertainties and increased waiting periods has become a common feature of many cross-border transactions, even if they only involve minor Austrian subsidiaries as part of the target structure. Recently, the competent Austrian ministry has reacted and has decreased the waiting period for smaller transactions.

Looking Ahead

Based on the pipeline of transactions for the coming months, market observers expect that trends which could also be observed in the second half of 2025, including carve-out and distressed transactions, will continue to have an impact on the Austrian M&A market in 2026. It is also expected that there will be a surge in M&A activities once key areas of global concern (global wars and crises, tariff issues, among others) have been resolved or ameliorated.