GERMANY Law and Practice Contributed by: Marc Löbbe, Michaela Balke, Oliver Schröder and Martin Kolbinger, SZA Schilling, Zutt & Anschütz
by a non-EU/EFTA investor. Particular notification obli - gations apply for 27 business sectors involved in criti - cal infrastructure or critical technology: the acquisi - tion of voting rights reaching or exceeding 10%, 20%, 25%, 40%, 50% or 75% for seven of these sectors, or 20%, 25%, 40%, 50% or 75% for the other 20 sectors, or of assets constituting an essential or defin - able part of the operations of a German undertaking, is subject to a mandatory FDI filing and a standstill obligation. Even outside these 27 sectors, the acquisition of at least 25%, 40%, 50% or 75% of voting rights or of assets constituting an essential or definable part of the operations of a German undertaking by inves - tors from outside the EU/EFTA can be reviewed by the German government to determine whether such acquisition may potentially affect public order or secu - rity in Germany or other EU member states. FDI control law now also covers the acquisition by a non-EU/EFTA investor of an “effective stake in the control” of a German undertaking in another way, particularly an acquisition of voting rights nominally remaining below the relevant threshold combined with additional rights effectively resulting in influence cor - responding to a share of voting rights meeting the relevant threshold. The German government may ultimately prohibit such acquisitions or impose obligations to safeguard public order or security. With the prohibition of a multibillion- euro non-EU acquisition (Global Wafers/Siltronic) in 2022, as well as the prohibitions of, inter alia, the Heyer Medical and Elmos transactions, and more recently MAN Energy Solutions (2024), FDI controls will continue to play an ever-greater role in the practice of M&A law. 2.4 Antitrust Regulations The merger control provisions of the German Act against Restraints of Competition ( Gesetz gegen Wettbewerbsbeschränkungen ) apply if transactions qualify as concentrations and the parties meet cer - tain thresholds. If a transaction is subject to German merger control, it must be notified to the German Fed - eral Cartel Office ( Bundeskartellamt ) and must not be consummated before clearance has been obtained.
It is a particular feature of German merger control law that concentrations subject to review are not limited to control acquisitions. For instance, acquisitions of 25% or 50% of the voting rights or capital interests also qualify as concentrations, as do acquisitions of a competitively significant influence. The notification thresholds are met if: • the combined aggregate worldwide turnover of the parties involved exceeds EUR500 million; • the German turnover of at least one party involved exceeds EUR50 million; and • the German turnover of another party involved exceeds EUR17.5 million. If the last threshold (ie, a German turnover exceeding EUR17.5 million) is not met by the target or another party, a notification will still be required if the value of the consideration for the transaction exceeds EUR400 million and the target has significant activities in Ger - many. Aside from the German antitrust regulator, other national antitrust authorities may be competent to review concentrations, depending on applicable turnover thresholds. If certain (higher) turnover thresh - olds are met, competence for merger control is shifted away from the national (German) authority to the Euro - pean Commission. 2.5 Labour Law Regulations In the public M&A context, the target company’s man - agement board must, without undue delay, inform the company’s works council or, if there is no works coun - cil, the workforce directly of a takeover announce - ment, and must forward the public offer document to them. The works council may comment on the offer; its comments have to be attached to, and published with, the target’s management board’s reasoned opin - ion. In private M&A, the (economic committee of the) works council of the target must equally be informed of any acquisition of the enterprise before binding documents are executed.
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