Subsequent Acquisitions Do Not Retroactively Require Approval for the Initial Purchase of Shares (Supreme Court of Austria, August 27, 2026, 1 Ob 87/26i).

If a stake in an Austrian company is acquired in several steps, for the purposes of the Investment Control Act (“InvKG”), the mere temporal proximity of several individual acquisitions within the framework of a “consolidated assessment” does not mean that a single acquisition subject to approval as a whole should be assumed. Rather, the individual acquisitions must be considered in isolation according to their chronological sequence. This is the core practical finding of the OGH in its decision of August 27, 2026, 1 Ob 87/26i.

Background and Case in Question

1. Relevant Provisions of the InvKG

Pursuant to § 2(1) of the InvKG, a foreign direct investment requires approval from the Federal Minister for Digitalization and Business Location if the target company operates in one of the sectors listed in the annex to the InvKG, if provisions of European Union and international law do not preclude an approval requirement, and if, in the case of an acquisition of shares in the target company, a minimum percentage of voting rights as specified in §§ 4 and 5 of the InvKG. 

As a general rule, this minimum percentage under Section 4 of the InvKG is 25% and 50%, unless the target company operates in particularly sensitive sectors, such as the manufacture of defense equipment or the operation of critical infrastructure. In such cases, this minimum percentage, pursuant to § 4 InvKG, is 10%, 25%, and 50%.

 2. Facts of the Case Reviewed by the Supreme Court

In practice, it frequently occurs that a significant acquisition of an interest in a target company takes place in several stages. In such cases, multiple share purchase agreements are concluded in chronological order; however, it is only when these agreements are ly executed that a threshold relevant under the InvKG is exceeded in total. The sequence of the closings of these share purchase agreements—and thus the actual transfer of ownership of the respective equity interest—does not necessarily have to correspond to the sequence in which the share purchase agreements were concluded. This is because the respective share purchase agreements may provide for different conditions precedent that may be satisfied at different points in time.

In the case at hand, a buyer subject to the InvKG had entered into a share purchase agreement on February 1, 2024, subject to a condition precedent, for shares in an Austrian publicly traded company representing 6.87% of the share capital. At that time, the buyer did not yet hold any stake in the target company. Additional share purchase agreements subject to conditions precedent followed in March 2024. Had all of these share purchase agreements been executed, the 25% threshold would have been exceeded. The transfer of ownership of the shares purchased on February 1, 2024, took place in July 2024. 

The seller under the stock purchase agreement dated February 1, 2024, subsequently refused to continue performing the agreement, asserting that the stock purchase agreement dated February 1, 2024, was subject to approval under the InvKG due to subsequent acquisitions that, in total, exceeded the 25% threshold. All acquisitions must be aggregated as part of a consolidated assessment, even if the share purchase agreement dated February 1, 2024, did not exceed the relevant thresholds under the InvKG. The share purchase agreement dated February 1, 2024, is therefore now subject to the statutory condition precedent pursuant to § 27 InvKG. 

Decision of the Supreme Court

The Supreme Court (OGH) confirmed the view already held by the Vienna Higher Regional Court that there is no legal basis for a “consolidated approach” under the InvKG. Rather, the sequence in which the respective purchase agreements were concluded is strictly decisive. The timing of the closing is irrelevant. Only the purchase agreement that causes a threshold relevant under the InvKG to be exceeded requires approval under the InvKG. Exceeding a threshold through a subsequent acquisition does not result in a retroactive approval requirement for an earlier acquisition.

The Supreme Court emphasized that the legislative materials for the InvKG contain no indication that the legislature intended to provide for a retroactive consolidated approach in the case of successive share acquisitions.

The fact that the InvKG occasionally uses the term “direct investment” in the plural does not imply the necessity of a consolidated assessment. Furthermore, there is no explicit provision analogous to the European Merger Regulation, under which a series of legal transactions carried out within a reasonably short period of time is treated as a single merger.

It is not clear why an acquirer who, through additional share acquisitions, exceeds the thresholds specified in § 4 InvKG would also be prohibited from making the first share acquisition—which falls below the threshold—based on the fiction of a “single acquisition.” There appears to be no risk of circumvention of the review mechanism.

Outlook

The Supreme Court’s decision of August 27, 2026 (1 Ob 87/26i) is an important contribution to legal certainty in M&A practice.

Conducting transactions without the required approval under the InvKG is a criminal offense punishable by law pursuant to § 26 InvKG. Furthermore, transfers of shares made on the basis of a contract subject to approval are invalid, as such a contract is deemed to have been concluded subject to the statutory condition precedent that approval be granted (§ 27 InvKG).

It has now been clarified that, with regard to whether thresholds under the InvKG have been exceeded, the decisive factor is strictly the date of conclusion of the respective share purchase agreement. Thus, it is possible at any time to determine with legal certainty whether a specific acquisition transaction is subject to an approval requirement under the InvKG.