GERMANY Law and Practice Contributed by: Daniela Seeliger, Christoph Barth and David-Julien dos Santos Goncalves, Linklaters
2.8 Foreign-to-Foreign Transactions Generally, German merger control rules also apply to mergers taking place outside Germany, as long as the relevant turnover thresholds are met and the proposed merger has a domestic effect. The FCO’s Guidance on domestic effects in merger control (2014) deals with domestic effects of foreign-to-foreign mergers and joint ventures. According to these guidelines, a trans - action has domestic effects if it is likely to influ - ence competition on the German market directly (appreciable effect). Different factors are taken into account – eg, the involved parties’ business activities in Germany or parties’ domestic sub - sidiaries/branches. However, it is not explicitly required that the tar - get company has a presence or assets in Ger - many for establishing these effects. 2.9 Market Share Jurisdictional Threshold There are no market share thresholds under Ger - man merger control law. 2.10 Joint Ventures The following joint ventures are subject to merg - er control legislation: • the acquisition of joint control of another undertaking; • the acquisition of shares reaching 25% or 50% of the capital or the voting rights in a situation in which at least one other undertak - ing holds 25% or more of the shares; and • the acquisition of a competitively significant influence in an undertaking controlled by a third party.
In Germany, joint ventures generally have to be notified if two or more acquirers gain joint con - trol, or if each of them acquires at least 25% of the shares, or if they acquire a competitively significant influence on the target. Contrary to the EU merger control regime, this also includes non-full-function joint ventures. If a participating undertaking is jointly controlled by several undertakings, the full turnover of all parent companies is considered when the turno - ver thresholds are calculated. Likewise, in cas - es where a parent company is a participating undertaking in a transaction, the full turnover of the joint venture has to be considered for the turnover calculation, not only in the amount of the interest held. 2.11 Power of Authorities to Investigate a Transaction If a transaction does not meet the jurisdictional thresholds, the FCO does not have any com - petence to make further investigations or “call in” a transaction under the merger control rules. However, in view of the ECJ’s Towercast judg - ment, it cannot be ruled out that certain trans - actions, albeit falling below the merger control thresholds, could be scrutinised under the rules regarding the abuse of a dominant position. 2.12 Requirement for Clearance Before Implementation The participating undertakings are prohibited from implementing the transaction prior to clear - ance. 2.13 Penalties for the Implementation of a Transaction Before Clearance If the participating undertakings infringe this suspension obligation, they are subject to fines of up to 10% of the undertaking’s total group turnover in the preceding business year. Indi -
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