State pre-emption right in the Hungarian M&A market
The Hungarian state legislature has recently passed a number of laws seeking to give special protection to certain parts of their national economy. For example, with regard to real estate, a so-called “self-identity” law has been introduced, giving municipalities the possibility to make it more difficult or prohibit newcomers from acquiring real estate on the grounds of their interests in the municipality.
With regard to company acquisitions, Government Decree No 561/2022 (XII/23), recently amended on 24 June 2025, has placed the right to exercise the right of first refusal or even to prohibit the transaction at the ministerial level, rather than at the municipal level. The reason given by the legislator for the regulation is the public interest, but this is not specified in detail.
The term of strategic company
These options are available for companies that are classified by law as strategic companies and that are intended to be acquired by a foreign investor. In each case, the definition of a strategic company must be based on the actual activity of the company concerned and whether it falls within one of the strategic business lines.
Interestingly, one of the strategic sectors highlighted by the legislation contains specific provisions for the activity of “Electricity generation from renewable sources”, which mainly concerns companies operating solar power plants.
The foreign investors concerned
The provision divides foreign investors into two main categories. It distinguishes between (i) nationals and legal entities from the European Union, the European Economic Area and the Swiss Confederation and (ii) from outside these territories.
Value of the investment
In some cases, the legislation excludes from the transactions to be examined transactions that are smaller than an investment in terms of the amount of the investment, and for these transactions the applicable limit is e tat HUF 350 million in terms of the total value of the investment.
The examined types of the transactions
It is not only in the context of the sale of shares and business quotes when it is necessary to examine whether a notification to the Ministry is required. Several transactions, including the increase of capital in the company, the transformation, merger or division of a strategic company, the issue of bonds convertible into, subscribable to or exchangeable for shares in a strategic company, and the creation of a beneficial interest in shares or units of a strategic company, are among the transactions to be examined.
The lenghts of the procedure
The Ministry has a basic procedural time limit of 45 days and a 15-day additional period, which may be extended by up to 30 working days on three occasions, of which the affected party will be notified in writing before the expiry of the time limit. This will definitely slow down the acquisition process and make the success of the M&A transaction uncertain for this period, while it may also generate a loss of interest for the buyer.
Practising of the state pre-emption right
On the basis of their examination, the competent Minister, acting on behalf of the Hungarian State, may prohibit the transaction and the Hungarian State, through the Hungarian National Asset Management Limited Company or another designated body, may exercise its pre-emption rights in respect of the company concerned, subject to the conditions set out in the transaction.
Penalty for the missed examination
Failure by the company to complete the necessary procedure could be an obstacle to its acquisition of ownership before the Companies Registry and could result in a significant fine for the companies concerned.
Mandatory legal representation
Legal representation is mandatory in the proceedings before the Ministry, and it is therefore essential to engage a lawyer. If you wish to buy a company in Hungary, please contact our colleague, the author of the article, Dr. György Zalavári, who is the head of the Ecovis Zalavári Legal Hungary office
