GERMANY Law and Practice Contributed by: Christoph Nolden, Nicolas Ott, Stefan Mendelin and Thomas Glaser, SZA Schilling, Zutt & Anschütz
chtangebot ) if their combined share of voting rights reaches 30%. In addition, legislative changes were implemented in 2020 that also affect activist shareholders. The ARUG II regulates information rights and information duties between the company, its shareholders and interme- diaries (eg, custodian banks). Specifically, a listed company may request information about its share- holders from the custodian banks (“know your share- holders”). Additionally, the ARUG II established new transparency duties for institutional investors, asset managers and proxy advisers in order to align their actions more closely with investor interests and sus- tainable corporate governance. Institutional Shareholder Services (ISS) and other proxy advisers have revised their policies in ways that materially affect German companies. Notably, ISS now generally oppose the election of former CEOs as supervisory board chairs, even when statutory cooling-off periods are met. Glass Lewis and IVOX (the proxy arm of BVI) have also tightened expec- tations for board independence, disclosure of ESG oversight, and the format of virtual general meetings. These evolving expectations have increased the governance-related pressure on listed companies in Germany but are being monitored against the back- drop of general political developments in major capital markets, eg ISS now offer special ESG-sceptic voting policy options for clients. 11.2 Aims of Shareholder Activism Until recently, activist shareholders were not as active in Germany as they were, for example, in the US market (in contrast to so-called predatory sharehold- ers ( räuberische Aktionäre ) litigating against resolu- tions adopted by general meetings). However, there has been a significant upward trend in recent years. Prominent examples in 2024 included Mister Spex SE, Delivery Hero SE, Bayer AG, Brenntag SE. Further examples included shareholder activism at Deutsche Wohnen (residential property), SAP (software), Thys- senKrupp (steel production and steel processing) and Bilfinger (construction). In 2025, activity has continued: Elliott disclosed a near to 5% stake in RWE and publicly pressed for
a “significant” increase to the buyback programme, a campaign widely covered in the financial press; at Thyssenkrupp’s January 2025 AGM, influential insti- tutional holders (including DWS and Deka) demanded a clearer strategy and stronger execution; and activist fund 7Square urged insurer Nürnberger Beteiligungs AG to open its process to competing bids rather than proceed with exclusive talks, arguing the company was undervalued. These episodes illustrate that Ger- many remains firmly on activists’ radar, even as the mix of actors ranges from classic hedge funds to assertive long-only investors. These shareholders’ activities are mainly economically driven. Activist shareholders typically aim to increase the value of the company by changing its strategy – for example, by splitting up conglomerates that are perceived as cumbersome, thereby creating a profit for themselves. However, ESG-related issues and – in particular – climate action have become another focal point for activist investors. Continued pressure on capital allocation (buybacks/dividends), portfolio moves and governance is observed, with Germany remaining one of Europe’s core markets for cam- paigns, especially in industrials and chemicals. 11.3 Shareholder Activist Strategies Activist strategies have evolved to include greater reli- ance on proxy adviser campaigns and votes against individual supervisory board members. In 2024, ISS and Glass Lewis recommended their clients to vote against reappointments of chairs at prominent Ger- man companies such as BASF and Munich Re, citing concerns over independence. This trend illustrates growing influence of non-binding voting recommen- dations and reinforces the importance of proactive engagement with proxy advisers. In the past, activist shareholders often started their activities relatively quietly – for example, by keeping their stakes below the relevant reporting thresholds under German securities trading law. With a view to current law, however, it should be noted that listed companies are henceforth provided with information rights regarding their shareholders, which gives them the opportunity to detect activists at an earlier stage.
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