GERMANY Law and Practice Contributed by: Leif Gösta Gerling, Matthias Krämer, Anna Reuber and Jiabao Gerling-Li, LPA
Notification or Approval Requirements A JV may be subject to prior notification if it consti - tutes a concentration as defined in Section 37 of the GWB and if the following thresholds are met: • the combined worldwide turnover of the undertak - ings concerned exceeds EUR500 million; • one of the undertakings concerned must have achieved a turnover of more than EUR50 million in Germany; or • another undertaking concerned must have achieved a turnover of more than EUR17.5 million in Germany. Even if the EUR17.5 million German threshold is not met, a transaction may be subject to prior notifica - tion if it exceeds the EUR400 million transaction val - ue threshold, provided that the target has significant operations in Germany. However, if a concentration falls within the scope of EU merger control, German merger control does not apply. If the JV has no national effects (ie, no impact on the German market), notification may not be required. 3.5 Listed Companies and Market Disclosure Rules In Germany, publicly listed companies engaging in JVs must adhere to specific disclosure obligations to ensure transparency and maintain investor con - fidence. These obligations are primarily governed by the German Securities Trading Act (WpHG), the German Securities Acquisition and Takeover Act, the EU Market Abuse Regulation (MAR) and the German Stock Corporation Act. Under the WpHG, shareholders of listed companies are required to notify the issuer and BaFin whenever their voting rights reach, exceed or fall below thresh - olds of 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%. This includes both direct holdings and those held indirectly, such as through financial instruments or derivative positions. The disclosure must be made promptly to the company and BaFin, and at the lat - est within four trading days. Failure to comply can result in sanctions, including the suspension of voting rights. The issuer must in turn publish these notifica - tions without undue delay.
The German Securities Acquisition and Takeover Act mandates that investors intending to acquire control over a listed company must make a public takeover offer. This requirement ensures that all shareholders have an equal opportunity to participate in the offer and receive fair treatment. In addition, the MAR oblig - es issuers to immediately disclose any inside infor - mation that directly concerns them, which typically includes the formation or material amendment of a JV or JV agreement, unless a temporary delay is justified. The German Stock Corporation Act further stipulates that any significant changes in shareholding or control structures must be disclosed to the JV and, in some cases, to the public. This is to prevent market manipu - lation and ensure that all stakeholders are informed of developments that could affect the company’s gov - ernance or financial stability. In summary, listed companies in Germany must navi - gate a complex regulatory landscape when entering into JVs. Adhering to these disclosure requirements is crucial for maintaining legal compliance and uphold - ing market integrity. 3.6 Transparency and Ownership Disclosure Ownership structures are disclosed by registering the ultimate beneficial owners (UBOs) with the transpar - ency register ( Transparenzregister ), which has been introduced in Germany based on the GwG. The gen - eral requirements for the identification and registra - tion of the UBO also apply for JVs, regardless of their respective legal form. UBOs can only be natural persons and are only con - sidered to be UBOs if they directly or indirectly hold more than 25% of the capital shares or the voting rights in a legal entity, or exercise control in a compa - rable manner on a legal entity. Since shareholders of a JV are usually at least two legal entities themselves, no direct UBO exists. However, if at least one of those legal entities directly holds more than 25% of the capi - tal or voting rights in the JV, any natural person con - trolling that legal entity in turn (ie, holding more than 50% of the capital or voting rights in the legal entity being the shareholder of the JV) is considered to be the indirect UBO of the JV and, therefore, must be filed with the transparency register. If no natural person
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