GERMANY Law and Practice Contributed by: Daniela Seeliger, Christoph Barth and David-Julien dos Santos Goncalves, Linklaters
the acquirer does not exercise the voting rights attached to the shares and resells the shares within one year. Exemptions Internal restructurings or reorganisations within the same economic entity are not subject to merger control. Further, concentrations of public institutions in the framework of municipal reforms (situ - ations where municipalities decide to merge their institutions or where municipalities merge themselves) are explicitly not subject to merger control review. In practice, this rule particularly affects hospitals and savings banks. Some hospital mergers are exempt from merger control under changes introduced by the Hos - pital Care Improvement Act ( Krankenhausver- sorgungsverbesserungsgesetz ). The exemptions apply to the following. • Transactions involving hospitals qualifying for government subsidies from the hospital struc - ture fund ( Krankenhausstrukturfonds ) and following the Federal State authority’s con - firmation that the merger otherwise complies with competition law (Section 187 (9) ARC). Such transactions will need to be closed by 31 December 2038 in order to benefit from the exemption. However, parties will have to file a short post-completion notice to the FCO and in case they filed a merger notification with the FCO, they have to inform the FCO of whether an application for certain funding has been submitted. • Cross-location hospital mergers under the Hospital Financing Act ( Krankenhausfinan - zierungsgesetz ) that are confirmed by the responsible Federal State authority, after con - sulting with the FCO, as necessary to improve
hospital care and not conflicting with compe - tition law, provided the merger is completed by 31 December 2030 (Section 187 (10) ARC). These transactions can only be notified to the FCO if the parties prove that the responsi - ble Federal State authority denied or did not issue the necessary confirmation. The exemption described above has recently been applied for the first time in a hospital merg - er between the university hospitals in Mannheim and Heidelberg. The German Ministry of Social Affairs, Health and Integration of Baden-Würt - temberg approved the transaction, although the FCO had previously prohibited the case In contrast, the merger control provisions are applicable (analogously) to voluntary mergers of statutory health insurers. Prior to a prohibition in this sector, the FCO has to consult with the relevant supervisory authorities and, partly, dif - ferent time limits and further specific rules apply. 2.4 Definition of “Control” The concept of control follows the EU merger control system and is regularly interpreted within this framework by the FCO. Control means the effective possibility of exercising decisive influ - ence on an undertaking on a lasting basis. The actual exercise of control is not required. Control may be conferred through rights, agreements or other means (legal or factual) that individually or jointly enable the acquirer(s) to determine the target company’s strategic business decisions. In terms of acquisition of minority interests, or other interests less than control, a transaction must be notified if the acquirer, following the transaction, holds 25% (or more) of the capital or the voting rights in another undertaking, or gains a competitively significant influence on another undertaking.
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