GERMANY Law and Practice Contributed by: Marc Löbbe, Michaela Balke, Oliver Schröder and Martin Kolbinger, SZA Schilling, Zutt & Anschütz
6. Structuring 6.1 Length of Process for Acquisition/ Sale The duration of a takeover process cannot be generalised and differs between private and public transactions. In private M&A transactions, the duration var - ies widely. In small transactions, the whole pro - cess can be completed in a matter of weeks. In large and more complex transactions, it can take months or in some cases years (considering the whole time from the planning stage to the clos - ing of the transaction). Public M&A transactions typically take around three months from the bidder’s announcement of the intention to issue an offer to completion (the maximum is 22 weeks; longer durations are possible if competing offers are published). The duration of preparatory actions, particularly stakebuilding and due diligence, are not includ - ed and can vary widely. 6.2 Mandatory Offer Threshold An investor who acquires 30% or more of the voting shares of a company that is listed on an organised market is required to issue a manda - tory offer to all other shareholders. The bidder may apply to BaFin to be exempted from the obligation, but such exemptions are only grant - ed in extraordinary cases. 6.3 Consideration Consideration is determined by market dynam- ics in the private M&A field. In a competitive landscape, locked-box deals with a pre-deter - mined fixed purchase price had become com - mon, but with a shift to more balanced negotiat - ing positions classic purchase price adjustments are increasingly accepted. Earn-out constructs
have also become more common due to valua - tion difficulties in the context of the ongoing eco - nomic disruptions, but are difficult to structure. In contrast, consideration in public transactions seeking control (or in mandatory offers) is heavily regulated. In principle, both cash and shares (or a mix of both) can be used as consideration. If the bid - der uses shares, these must be liquid and listed on an organised market, and the owners of vot - ing shares in the target must be offered voting shares as consideration. Moreover, if the bidder acquires 5% or more of the target shares for a cash consideration during the six months before the announcement of the takeover offer, a cash consideration must be offered to all sharehold - ers of the target; a consideration in shares can be offered as an alternative. When shares are publicly offered, equivalent disclosure and pro - spectus requirements apply, as in other public share offerings, and the German Securities Pro - spectus Act ( Wertpapierprospektgesetz ) must be adhered to. The bidder is obliged to offer consideration of an “adequate” value. Such consideration is required be at least equal to both: • the value of the highest consideration paid or agreed to by the bidder, a person acting in concert with the bidder or any of their sub - sidiaries for the acquisition of shares in the target within the six-month period prior to the announcement of the takeover; and • the weighted average price of such shares on the stock exchange during the last three months before the announcement of the takeover.
731 CHAMBERS.COM
Powered by FlippingBook