GERMANY Trends and Developments Contributed by: Christoph Nolden, Nicolas Ott, Stefan Mendelin and Thomas Glaser, SZA Schilling, Zutt & Anschütz
SZA Schilling, Zutt & Anschütz Otto-Beck-Straße 11 68165 Mannheim Germany Tel: +49 69 9769601 0
Email: info@sza.de Web: www.sza.de
Introduction The past 18 months have seen important changes in shareholder rights and activism in Germany. New laws, changing market practices and a significant increase in shareholder activism are shaping the dai- ly life of listed companies. At the same time, policy- makers are calling for a more efficient capital market that facilitates innovation and remains internationally competitive. Against this backdrop, this chapter of the guide examines the most important developments, explains their practical consequences and provides recommendations for companies, investors and other stakeholders. Legal Reform: Financing for the Future Act The Financing for the Future Act, in force since Decem- ber 2023, is considered the most comprehensive capi- tal market reform in more than a decade. In addition to multi-vote shares, it eases rules on SPACs, simplifies listing procedures and provides a greater flexibility in capital measures, aligning Germany closer with the UK and US markets. Investment banks welcomed the changes, highlighting that German issuers may now consider Frankfurt over foreign exchanges for IPOs. A central element of the Financing for the Future Act is the increase of the threshold for capital increases without subscription rights from 10% to 20%. This allows companies to raise fresh equity more quickly, without having to go through a lengthy prospectus process with mandatory subscription rights. Critics, however, fear that large investors may lose their influ- ence over important financing decisions. To address these concerns, the law still provides for challenge and appraisal proceedings, but these only
take effect after the capital measure has been com- pleted. Disputes thus shift from blocking a transac- tion to subsequent compensation. For companies, this means greater planning certainty; for investors, it means the need to assess potential compensation claims at an early stage. The (re-)introduction of multi-vote shares creates ten- sion between growth interests and minority protec- tion. While founders and anchor shareholders seek to secure long-term control, institutional investors demand effective sunset clauses to limit concentra- tion of power. Companies considering a dual-class model should therefore convincingly demonstrate how their governance structures protect the interests of all shareholders. Shareholder Activism: General Trends Germany is experiencing a continued increase in activ- ist campaigns. International hedge funds, large asset managers and domestic institutional investors are acting more confidently, demanding higher returns, better governance and more ambitious sustainabil- ity goals. The number of potential targets is rising, as many mid-sized and family-controlled companies are seen as vulnerable. Activism is not only driven by hedge funds – large asset managers are also behaving more assertively. A February 2025 study by Alvarez & Marsal showed that US investors are increasingly active in Europe. The study identified 141 potential activism targets in Europe for the next 18 months, including 33 in Germa- ny. This underlines Germany’s importance as a central market for activists, even though its regulatory and
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