GERMANY Law and Practice Contributed by: Marc Löbbe, Michaela Balke, Oliver Schröder and Martin Kolbinger, SZA Schilling, Zutt & Anschütz
4.5 Filing/Reporting Obligations See 4.1 Principal Stakebuilding Strategies and 4.2 Material Shareholding Disclosure Threshold . 4.6 Transparency If an investor issues a public takeover offer, the offer document has to state the objectives the bidder is pursuing relating to the target. Therefore, such infor - mation is disclosed to the public. Following the acquisition of 10% or more of the vot - ing rights in a company listed on an organised mar - ket, investors are required to inform the target com - pany of their intentions and their source of funding. The law specifies in detail the information to be dis - closed in such a scenario, which includes whether the investment serves strategic goals or is a mere capital investment, whether the bidder intends to increase the investment and whether there are intentions to influence the management or substantially change the capital structure. With regard to disclosure duties, a distinction must be made between listed and non-listed companies. If the target company (or the bidder/seller) is listed, it can be obliged to make ad hoc announcements at different stages of an M&A transaction. The European Market Abuse Regulation (MAR) governs the spe - cific requirements of the obligation to make ad hoc announcements, and states that an issuer must inform the public as soon as possible of inside information that directly concerns that issuer. It is therefore decisive whether or not the information in question is “inside information”. For this to be the case, the information must meet the following condi - tions: 5. Negotiation Phase 5.1 Requirement to Disclose a Deal • it must relate, directly or indirectly, to one or more issuers or to one or more financial instruments; • it must be of a precise nature; • it may not have been made public yet; and
a suspension of all shareholders’ rights for the period during which the infringement persists, and for even longer periods under certain conditions. Stock Corporations For private stock corporations and stock corpora - tions listed in the open market segment, disclosure thresholds and filing obligations are much less rigid. An investor is obliged to notify the German stock cor - poration if its stake in it exceeds or falls below 25% or 50% of the shares. Under certain circumstances, shares of third parties are to be attributed. The respective rules are similar but less complex than those applicable to companies listed on an organised market. Failure to comply with the notification requirements leads to a suspension of the relevant voting rights. Acquiring Shares in a GmbH The acquisition of shares in limited liability compa - nies (GmbH) follows its own legal rules. These rules allow the tracing of any acquisition of shares, since the commercial register contains a list of the sharehold - ers, which is to be updated after shares have been traded. The German Money Laundering Act The German Money Laundering Act ( Geldwäschege - setz ) also provides for certain disclosure requirements. All legal entities governed by private law, registered partnerships, trusts and similar legal forms are obliged to file certain data, including on the ultimate beneficial owner, with the Transparency Register. 4.3 Hurdles to Stakebuilding See 4.1 Principal Stakebuilding Strategies and 4.2 Material Shareholding Disclosure Threshold . 4.4 Dealings in Derivatives Dealings in derivatives are permissible but can lead to notification obligations (see 4.2 Material Share- holding Disclosure Threshold ). Generally, dealings in derivatives are not a feasible way to avoid or circum - vent disclosure obligations.
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