Hungary

Under Hungarian law, the most commonly used structure for M&A transactions remains the traditional share deal, where the purchaser acquires an ownership interest (share or business quota) in the target company. In such transactions, the legal identity of the target remains unchanged, and all assets and liabilities continue to be held by the target company.

Asset deals are also frequently used, especially where the purchaser intends to acquire only a specific business line, or an asset portfolio of the target company. In this structure, assets, liabilities, contractual positions and (in the case of a business transfer) employees of the target company are transferred to the purchaser. However, for asset deals the different categories of assets need to be transferred individually as Hungarian law does not fully recognise the concept of going concern.

Mergers and amalgamations are also available under Hungarian law, which result in universal succession, however, these structures are less commonly used in practice.

In the context of public M&A transactions, acquisitions are typically structured as a public takeover bid (tender offer). A proposed acquirer of shares issued by a listed company must launch a mandatory takeover offer, if, as a result of the acquisition, its ownership interest in the target company would exceed the applicable statutory threshold (as described below).

The Hungarian M&A market has been dynamic in recent years, with interest from both domestic and foreign acquirers. While the 2025 data is not yet available, according to local market reports, the aggregate value of announced M&A transactions reached a record level in 2024, despite relative stability in deal count (reflecting a number of high-value transactions). In that year approximately 110 deals were publicly announced, with an estimated total value in the multi-billion dollar range.

In terms of volume, deal counts have slightly increased in recent periods, with a mix of mid-market and larger strategic transactions contributing to overall activity. Domestic investors, including corporate and private equity participants, have accounted for a significant share of transactions, while the activity of foreign investors from the United States, Western Europe and Asia were limited to key sectors, and they often remained on the sell side of the transactions.

Regarding deal size, the Hungarian market shows a broad spectrum, from mid-market takeovers and carve-outs to some high-value strategic deals that materially influence market statistics. Government-linked investments in infrastructure and defence have also contributed to selective large transactions.

Sector trends have shown variation over time, but the manufacturing, industrial and technology sectors have been especially active. The information technology (IT) and service sectors also feature prominently, alongside energy and infrastructure-related deals.

The investor mix comprises strategic investors, domestic private companies, private equity and international investors.

Over the past 12–24 months, the Hungarian M&A market has remained active, with elevated aggregate transaction values recorded in 2024. While the number of announced transactions has remained relatively stable, the total value of deals reached historic heights, driven in part by the number of “mega” transactions. According to the 2024 market data, the estimated aggregate value of yearly M&A transactions was approximately USD 9 billion.

The sector focus has shifted, with industrial and manufacturing assets gaining prominence relative to technology and IT deals, although technology and services remain active segments. Manufacturing was the most targeted sector in recent reported periods, followed by IT, energy and logistics.

Macroeconomic factors have materially influenced dealmaking. Elevated interest rates and inflation in Hungary over the past 24 months created economic pressures and resulted in adjusted valuations, while recent easing of inflation and gradual normalisation of financing conditions have supported investor sentiment and helped sustain transaction volume. At the same time, geopolitical uncertainty in Europe and the Hungarian government’s disagreements with the EU (which resulted in budgetary difficulties) have had a mixed effect — these have not substantially derailed outbound or inbound investment interest, but have nevertheless contributed to cautious strategic planning.

Over the next 12–24 months, Hungarian M&A activity is expected to remain broadly resilient; however, sector dynamics and the investor mix are likely to be significantly influenced by the outcome of the upcoming parliamentary elections.

The next Hungarian parliamentary elections are scheduled for April 2026. In practice, the period leading up to elections tends to heighten market participants’ sensitivity to regulatory and policy considerations and is expected to lead to short-term “wait-and-see” dynamics, especially in politically or strategically sensitive sectors.  

Given that the material portion of high-value transactions has been generated by market participants linked to the current ruling party, a change in government could lead to a partial realignment of the M&A market, both in terms of transaction flow and deal counterparties.

Similar considerations apply to the investor mix. In recent years, investment activity from China (and the Far East in general) has increased significantly. While maintaining strong relations with these countries remains a priority for successive governments, a potential change in the governing party may result in renewed or increased interest from Western European investors, especially if relations with the EU improve.

From a sectoral perspective, investments related to the automotive industry have been dominant in recent years, particularly in connection with battery manufacturing for electric vehicles. In response to broader international trends, it is expected that Hungary will also see increased M&A activity in the energy sector (renewables and infrastructure) and potentially in AI-related investments, including data centres.

M&A transactions in Hungary are primarily governed by the Civil Code (Act V of 2013), the Companies Act (Act V of 2006) and sector-specific legislation. Public transactions are additionally subject to the Capital Markets Act (Act CXX of 2001).

Transactions in Hungary are generally overseen by the following regulators:

• The Competition Authority (Gazdasági Versenyhivatal or GVH). If the transaction amounts to a concentration and meets certain thresholds, the requirement for prior approval from the GVH applies. The GVH reviews M&A transactions from an antitrust perspective and examines whether a transaction would significantly impede effective competition on the Hungarian market. Transactions subject to clearance may not be implemented prior to approval.
• Sector-specific regulators. Where the acquisition concerns a regulated entity, the transaction may be subject to the prior approval of the competent supervisory authority. For example, acquisitions involving financial institutions, investment firms, fund managers (in certain cases) or insurance undertakings fall under the supervision of the Hungarian National Bank (Magyar Nemzeti Bank or MNB). Acquisitions of market participants in the natural gas or electricity markets may require approval from the Hungarian Energy and Public Utility Regulatory Authority (Magyar Energetikai és Közmű-szabályozási Hivatal or MEKH). In such cases, the direct (and in certain cases, even the indirect) acquisition of an ownership interest in the target company is subject to prior regulatory approval.
• Foreign direct investment (FDI) authorities. FDI filings under the Special FDI Act shall be submitted to the Ministry of National Economy (Nemzetgazdasági Minisztérium), while the Prime Minister’s Cabinet Office (Miniszterelnöki Kabinetiroda) has competence concerning FDI filings under the General FDI Act.
• Public takeovers. In the case of public takeovers, the takeover offer (tender offer) shall be submitted to the MNB for approval.

In Hungarian M&A transactions, cash consideration is most commonly used. Hungarian law does not prescribe restrictions on non-cash considerations; therefore, transactions may also be structured using shares as considerations. Deferred or contingent payment mechanisms, such as earn-outs, are also permitted and used in practice.

The scope of due diligence in Hungarian M&A transactions is aligned with international market practice, unless the local target’s activities require any sector-specific or enhanced review.

The due diligence review generally focuses on corporate matters (ownership and governance), FDI notification obligations, merger filing analysis, financing arrangements, material agreements, employment law matters, regulatory questions (including permits and authorisations), intellectual property, IT, data protection, litigation and disputes.

In addition to legal due diligence, separate financial and tax due diligence is standard market practice and, depending on the nature of the target and the transaction, the review may also cover compliance, environmental, social and governance-related matters, and operational risks.

Access to information during the due diligence exercise is subject to confidentiality constraints. While legal advisers are bound by statutory professional secrecy obligations, disclosure to the counterparty and other advisors is generally subject to the execution of a non-disclosure (confidentiality) agreement.

In public M&A transactions, the negotiating parties may keep the transaction confidential by adhering to the provisions of EU Market Abuse Regulation on delaying the disclosure of inside information.

W&I insurance is available in Hungary through a limited number of providers, but its use cannot yet be regarded as widespread in domestic M&A practice (it is generally used in larger cross-border transactions, where more sophisticated international investors are involved).

Where applied, buy-side policies are the prevailing structure. These are generally viewed as more efficient from a financing and security package perspective.

From a negotiation perspective, the availability of W&I insurance often leads to limited (capped) seller liability and smoother talks on the representations and warranties to be provided by seller. The insurer’s underwriting requirements may also affect the negotiations regarding the enforcement of warranty claims (e.g. time limitations on enforcing the claim).

Hungary has two separate and different FDI regimes in force, and the need for FDI screening shall be evaluated under both regimes separately.

The first regime, regulated by the General FDI Act (Act LVII of 2018), focuses on a narrower scope and covers sectors closely related to national security and public utility services, while the second FDI regime, regulated by the Special FDI Act (Act L of 2025) covers a much wider part of the economy and affects more deals in general.

Both regimes concentrate mainly on:

• the origins/residence of the investor (whether it qualifies as a foreign investor under the respective measures);
• the activities of the Hungarian company concerned; and
• the type of transaction.

If the investor does not qualify as a foreign investor, then the personal scope of the FDI regime does not apply to the investor; thus, no FDI screening is needed even if the Hungarian target pursues listed activities. Equally, if the Hungarian target does not carry out such activities that are listed in the relevant laws, then no FDI clearance will be needed even if the investor is from outside the EU or the EEA. Finally, if the transaction is not caught by the transaction type rules (e.g. the exemption rule for indirect transactions), then the transaction is not notifiable even if the foregoing criteria are met.

Public M&A transactions in Hungary are subject to strict disclosure and publication requirements under the Capital Markets Act (Act CXX of 2001) and the supervision of the MNB acting as the competent supervisory authority.

The offeror (and the mandated investment service provider) is required to submit the public takeover offer (tender offer) and its mandatory attachments to the MNB for approval. At the same time, the takeover offer must be delivered to the management body of the target company and its immediate publication must be initiated, clearly indicating that the offer has not been approved by the MNB and whether competition proceedings have been initiated.

Following approval (which is deemed to have been granted if the MNB does not issue a decision within the statutory deadline), the offeror must promptly publish:

• the fact of the regulatory approval;
• the approved takeover offer; and
• the opening and closing dates of the acceptance period.

Upon completion of the acceptance period, the offeror must notify the MNB and publicly disclose the results of the takeover offer within two calendar days and the fulfilment or non-fulfilment of payment of the offer consideration (including reasons for non-performance) within two calendar days from the payment deadline.

The target company is required to publish the takeover offer and the outcome of the supervisory procedure as extraordinary disclosures.

Public takeovers in Hungary are primarily regulated by the Capital Markets Act (Act CXX of 2001) and supervised by the MNB.

A mandatory takeover offer must be launched (with prior regulatory approval), if an acquirer (including persons acting in concert, and counting direct and indirect holdings) intends to acquire more than 25% of the voting rights where no other shareholder holds more than 10%, or more than 33% of the voting rights. The offer must be made for all voting shares and on an equal treatment basis.

The offeror must mandate an authorised investment service provider and submit the offer and attachments to the MNB for approval and evidence that it has sufficient funds for settlement. The offer submitted to MNB needs to be published (first, as “not yet approved”), and following approval, the offeror is required to publish the approved offer as well, together with the acceptance period, which must be 30–65 days (including any extension). During the offer period, statutory conduct rules apply, including restrictions on certain transactions by the offeror and related persons in the target shares outside the offer process.

Competing bids (counter-offers)

A competing bid (counter-offer) may be made up to the 15th day before the end of the acceptance period. A counter-offer is admissible only if it is more favourable to shareholders (this requires at least 5% higher HUF-equivalent consideration than an existing offer, which margin also applies to all subsequent counter-offers). Upon approval and publication of the counter-offer, the prior offer lapses.

Deal protection

The Capital Markets Act does not specifically provide any deal protection measures the offeror may implement. Therefore, while deal protection measures are not prohibited, those are materially constrained by:

• the takeover regime’s equal treatment principle;
• mandatory disclosure rules; and
• the target board’s “frustrating action” limitations during the offer period where the articles of association so provide.

In practice, measures such as exclusivity, “no-shop” or break fees are assessed conservatively and must not impede shareholder decision-making or the orderly conduct of the offer.

Minority shareholder rights

Hungarian takeover rules provide both sell-out and squeeze-out type protections for minority shareholders:

• Sell-out rights (minority put option). If, at the close of the offer process, the offeror’s influence reaches 90%, remaining shareholders may require the offeror to purchase their shares. The minimum price is aligned with statutory pricing rules (and, in certain cases, linked to the higher of the offer price and the equity-based metric).
• Squeeze-out right (offeror’s call option). If, following a successful offer, the offeror holds 90% or more of the voting rights (and has complied with the required procedural requirements, including funding), it may force the acquisition of the remaining shares. The procedure includes notice/publication and deposit of consideration for the benefit of remaining shareholders.
• Additional sell-out protection in “break-through” scenarios. Where the offeror reaches 75% and exercises the break-through right and amends the target company’s articles of association or changes the composition of the board of directors or the supervisory board, remaining shareholders may have a time-limited sell-out right at the relevant statutory basis.

M&A disputes in Hungary are generally addressed first through amicable settlement, including management negotiations or other escalation mechanisms as provided by the Sale and Purchase Agreement (SPA).

In smaller and purely domestic transactions, it is common for parties to agree on the jurisdiction of the Hungarian ordinary (state) courts, with Hungarian law as governing law. In local transactions, parties frequently decide to opt for domestic arbitration, before the Permanent Arbitration Court attached to the Hungarian Chamber of Commerce and Industry (Magyar Kereskedelmi és Iparkamara mellett működő Állandó Választottbíróság).

In larger transactions, and especially where one or both sides involve foreign parties, international arbitration is the prevailing forum. While ICC arbitration remains widely recognised, parties often view it as disproportionate in cost relative to typical local deal sizes. Therefore, there is a growing preference for regional arbitral institutions, such as the Vienna International Arbitration Centre (VIAC).

As regards governing law, Hungarian law is standard for local deals. In deals involving a foreign element, the governing law is commonly the law of the party with the highest bargaining power, or a commonly used neutral framework (often English law).

In 2025, market reports continued to show material deal activity in IT and energy, alongside manufacturing, which is consistent with technology being a core value driver even in traditional sectors (e.g. automation, Industry 4.0 integration and software-heavy supplier capabilities). In parallel, Hungary has articulated a renewed AI strategy for 2025–2030, signalling policy focus and an expected increase in AI-related investments.

A notable 2025 theme is AI-linked infrastructure (data centres, cloud and connectivity). Demand for AI-focused data centre capacity has increased significantly during 2025, and this is expected to translate into Hungary as well, where power availability, granting of permits, and grid access can be decisive value drivers. The practical M&A opportunity set is therefore likely to include acquisitions of data-centre-ready real estates, carve-outs of enterprise IT infrastructure units, and joint ventures combining land, power and specialist operators.

In fintech, the key-driver is less “pure-play” fintech and still more bank–fintech collaboration and consolidation around regulated capabilities (e.g. several acquisitions related to robo-advisory services).

For the next 12 months, the most likely emerging trends are:

• AI/data centre and energy deals (where power and grid capacity are key);
• tech-enabled industrial consolidation (e.g. software companies); and
• regulated digital finance acquisitions (to acquire capability rather than customer base).

Currently, foreign private equity M&A activity in Hungary is virtually non-existent given the perceived country risk and its consequences of potential exits. It must also be noted that Hungarian law sometimes struggles to apply general concepts that are widely recognised elsewhere, which again may discourage private equity investment and formation of joint ventures.