GERMANY LAW AND PRACTICE Contributed by: Daniel Möritz, Jan Bonhage, Hendrik Bockenheimer, Carl-Philipp Eberlein, Markus Ernst, Matthias Rothkopf, Christoph Wilken and Alexander Rang, Hengeler Mueller
6.3 Remedies and Commitments In the vast majority of cases, the FCO grants an uncon - ditional clearance within Phase I. The parties may offer commitments to address competition concerns raised by the FCO during a Phase II investigation. Various types of remedies may – depending on the specif - ic circumstances in the individual case – provide a feasible solution from the FCO’s perspective (eg, the divestiture of a “standalone” business to a suitable purchaser, removal of links with competitors, or other remedies, such as commitments to grant access to the infrastructure, networks or key technologies). The FCO has a clear preference for divestments, leading to a direct change in the market structure, as opposed to remedies concerning the future market behaviour of the merging parties. 6.4 Antitrust/Competition Enforcement If the FCO is able to demonstrate a significant impedi - ment of effective competition, it can block a transac - tion or subject its clearance to commitments. At the parties’ request, the Federal Minister for Eco - nomic Affairs and Energy may overrule the FCO’s prohibition decision if the anti-competitive effects of the transaction are outweighed by advantages to the economy as a whole resulting from the concentration, or by overriding public interest. In practice, there have very rarely been cases where the parties have applied for such ministerial authorisation. Furthermore, decisions of the FCO are subject to judi - cial review by the Higher Regional Court in Düsseldorf. Decisions of the Higher Regional Court in Düsseldorf can be appealed to the Federal Court of Justice. Completion of a transaction before approval has been granted (“gun-jumping”) may lead to severe sanctions – in particular: • measures implementing the transaction are regard - ed as provisionally invalid until the FCO or court grants approval; • the FCO may order the dissolution of the transac - tion or any other remedy considered necessary to restore effective competition; and • the FCO may impose fines on the undertakings (maximum: 10% of an undertaking’s worldwide
group turnover) and/or individuals (maximum: EUR1 million) involved.
7. Foreign Investment/National Security 7.1 Applicable Regulator and Process Overview As mentioned in 1.2 Regulatory Framework for FDI , Germany has an FDI screening regime that includes share deals at or above the applicable screening thresholds (10% or 20% of the voting shares for critical targets, otherwise 25%) and equivalent asset deals. Critical Targets (10% or 20% FDI Screening Threshold) A 10% screening threshold triggering a mandatory FDI filing and clearance requirement applies to any foreign acquisition of a German defence company (including items on the export control list) and certain IT encryp - tion companies (sector-specific screening), as well as to the acquisition of critical targets in other sectors by non-European investors (cross-sectoral screen - ing). Such further critical targets with a 10% screening threshold include companies: • holding critical infrastructure above certain thresh - olds in the energy, water, nutrition, IT and telecom - munications, finance and insurance, health, trans - port and traffic sectors; • producing sector-specific software for the opera - tion of critical infrastructure; and • providing certain critical services for public com - munications infrastructures, as well as media companies with broad reach. In addition, a 20% screening threshold and the man - datory FDI filing and clearance requirement triggered by it apply to the following critical targets, among oth - ers, the developers and manufacturers of: • certain medicinal products, medical devices, personal protective equipment, and diagnostics for highly contagious diseases;
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