Introduction

It is widely believed that a coherent EU policy is needed to regulate takeover bids. The European Commission has been trying for more than a decade to create the conditions to develop an active cross-border market for corporate control. However, progress towards a cross-border mergers and acquisitions market has been hindered by the existence of different national takeover rules and costly structural and technical barriers to takeovers. After an initial draft was rejected in 2001, the Takeover Directive was finally adopted in 2004.

In Hungary, the Takeover Directive has been implemented by Act CLXXVI of 2005, amending Act CXX of 2001 on the capital markets (hereinafter the ‘Capital Markets Act’). Act CLXXVI entered into force on 20 May 2006.

Scope

The Capital Markets Act applies, inter alia, to the acquisition of a shareholding in the capital of any public limited-liability company with its registered office in the Republic of Hungary or whose shares are admitted to trading on a Hungarian regulated market.

However, the Hungarian rules and the Takeover Directive differ somewhat in scope. The Takeover Directive applies only to the securities of a company governed by the laws of the Member State in which all or some of its securities are admitted to trading on a regulated market. The Capital Markets Act, on the contrary, applies to the securities of any Hungarian limited company even if these securities are not admitted to trading on a regulated market.