GERMANY Law and Practice Contributed by: Leif Gösta Gerling, Matthias Krämer, Anna Reuber and Jiabao Gerling-Li, LPA
confidential information, permitted use, the duration of confidentiality, and exceptions for legal obligations. Unlike in some common law markets, a formal Due Diligence Questionnaire is not market standard in Germany; due diligence is usually conducted via a structured data room and Q&A process. During advanced negotiations, parties typically exchange term sheets, which are non-binding but set out the intended structure, key commercial terms, governance arrangements, equity split, capital and/ or other contributions to the JV, and initial operational guidelines for the JV. In Germany, term sheets often include indicative timelines, exclusivity periods and conditions precedent for entering into the definitive JV agreement. Exclusivity is dealt with either in the term sheet itself or in a separate exclusivity agreement, preventing parallel negotiations for a defined period. This secures the investment of time and resources in the transaction and prevents competitive interference. Market practice also expects preliminary agreements to address regulatory compliance (eg, antitrust filings if the JV exceeds thresholds under the GWB), intellec - tual property rights and a framework for dispute reso - lution or escalation procedures during negotiations. In sum, German JV negotiations are structured around NDAs, term sheets and exclusivity deeds, with mar - ket-standard provisions focusing on confidentiality, exclusivity, governance principles, regulatory compli - ance and dispute management, aligning expectations and providing a disciplined path toward the formal JV agreement. In Germany, public disclosure is not required at the early negotiation stage or when signing a letter of intent (LOI) or memorandum of understanding (MOU). However, certain regulatory filings must be considered before implementing a JV, including the following. • Merger control clearance under the GWB is required if the combined turnover of the JV parties exceeds national thresholds. Notifications must be submitted before closing. 5.2 Disclosure Obligations Regulatory Filing Requirements
• EU-level clearance under the EU Merger Regulation (FKVO) as amended by the Implementing Regu - lation (EU) 2023/914 applies when EU turnover thresholds are met. The JV cannot be implemented until approval is obtained. • Assessment of timing and sequencing: filings must be planned carefully to avoid delays in implement - ing the JV. • Consideration of national and EU requirements together is particularly relevant in cross-border JVs, to ensure compliance with all applicable juris - dictions. • The scope of information required in filings includes details on the parties, the JV structure and the projected commercial impact. • Legal consequences of non-compliance: failure to submit the required filings or obtaining clearance prematurely can lead to fines or restrictions on implementing the JV. These measures ensure that the JV is legally compli - ant before operations commence, and help to prevent regulatory risks. Corporate Disclosure After incorporation, the JV must be registered with the German Commercial Register, including the registra - tion of: • the shareholders and managing directors of the JV; • the articles of association (GmbH and AG), but not
the JV agreement (if any) itself; and • the share capital and legal form. This information is publicly accessible. Capital Markets and Ad Hoc Obligations
If a party to the JV is a listed company, disclosure obligations arise under both MAR and the WpHG, as follows: • inside information affecting share price must be disclosed without undue delay, potentially as early as the signing of binding agreements; • limited deferral of disclosure is possible under MAR and its delegated/implementing regulations; and • the EU Listing Act package (Regulation (EU) 2024/2809, Directive (EU) 2024/2810, Directive (EU)
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