Albania has taken another important step on its path toward European Union integration by publishing for public consultation a draft law introducing amendments to Law No. 10 236, dated 18.2.2010, “On the takeover of companies with public offerings.” This initiative aims to fully harmonize Albania’s rules on takeover bids with those of the European Union, reinforcing legal certainty and investor confidence in the country’s still-developing capital market.
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| Bank of Albania Headquarters, Skanderbeg square (April 2025) |
Why Takeover Rules Are Crucial for Albania’s Market Development
According to the explanatory report accompanying the draft law, a clear, predictable, and EU-compliant framework for takeover bids is essential for strengthening trust in the Albanian capital market. Rules governing takeover offers directly influence how control of listed companies can change hands, how minority shareholders are protected, and how boards of directors behave during sensitive transaction periods.
By aligning fully with the EU acquis, Albania introduces well-defined standards on key elements such as:
- The content and transparency of the offer document
- Mandatory deadlines and procedures
- The concept of a “fair price”
- Board neutrality during takeover periods
- “Breakthrough” rules
- Post-offer rights, including squeeze-out and sell-out mechanisms
These components together provide what the Albanian market has long lacked: legal certainty. For investors, certainty means reduced risk. For issuers, it means access to a wider pool of capital.
EU Harmonization and the 2030 Political Horizon
Albania is firmly positioned to complete full alignment of its legal framework with the European Union by the political horizon of 2030. For both investors and issuers, this sends a powerful signal: capital market rules in Albania are expected to become identical to those applied across the EU.
With this draft law, Albania effectively enters a much broader financial ecosystem. Investment banks, funds, and financial advisors operating across Europe will find familiar rules, reducing regulatory arbitrage and compliance costs. As a result, legitimate takeover offers are more likely to be completed successfully and within predictable timelines—an essential factor for a small market seeking large-scale capital inflows.
Lower Uncertainty, Faster Transactions, Stronger Protection
One of the most significant benefits of the proposed amendments is the reduction of uncertainty costs. When a bidder knows exactly what must be included in the offer document, how the fair price is calculated, and which defensive measures a target company’s board may or may not take, transactions become more efficient and transparent.
Moreover, mutual recognition of documents approved by EU or EEA authorities eliminates duplication, accelerating procedures and making Albania more attractive for cross-border transactions. For a smaller capital market, this is a key competitive advantage.
Why Companies Are Encouraged to List Under the New Rules
The new legal framework actively encourages Albanian companies to list and sell shares on regulated markets. The main incentives include:
- Permanent capital for growth: Listing provides long-term financing for expansion, digitalization, and geographic growth without increasing debt levels.
- Liquidity and transparent pricing: A regulated market enables fair valuation and orderly exits for existing shareholders. Listed shares can also be used as acquisition currency through stock-for-stock deals.
- Governance and reputation: Listing standards improve managerial discipline, enhance trust among clients and banks, and help attract top talent through employee share schemes.
However, these advantages can only materialize if the legal infrastructure supports them. A comprehensive takeover law does exactly that by preventing artificial control blockages, protecting minority shareholders, and ensuring predictable outcomes.
Clear Objectives of the Draft Law
The explanatory report outlines several concrete objectives, including:
- Expanded scope and clearer definitions, such as voluntary versus mandatory offers and shares with multiple voting rights.
- Greater transparency in offer documents, including detailed information on compensation, pricing, and valuation methodology.
- Stronger fair price rules, requiring mandatory price increases if higher prices are paid during the offer period and granting the Authority power to intervene in exceptional circumstances.
- Clarification of defensive measures and voting rights during takeover periods, addressing neutrality and breakthrough principles.
- Specific exemptions from mandatory offers in cases of financial resolution or intervention.
- Enhanced powers for the Authority, including cross-border cooperation, limited exemptions, and implementing regulations.
- Annual reporting to the European Commission and ESAP submission, ensuring public access and machine-readable data formats.
- Transitional provisions linked to EU accession and updated references to capital market legislation.
A Strategic Step Toward a Credible Capital Market
Ultimately, this law provides companies with a clear roadmap for major transactions, reassures investors that rules will be enforced fairly, and equips regulators with effective tools to protect market integrity. For Albania, it is not just about compliance—it is about building a trustworthy, EU-compatible capital market that can support economic growth in the years ahead.