GERMANY Law and Practice Contributed by: Marc Löbbe, Michaela Balke, Oliver Schröder and Martin Kolbinger, SZA Schilling, Zutt & Anschütz
In addition, most favoured treatment rules apply: if the bidder acquires shares at a higher price during the offer period or within 12 months after the end of the offer period, the higher price is to be paid to all shareholders who accept the takeover offer. 6.4 Common Conditions for a Takeover Offer Mandatory offers cannot be made subject to conditions (except where the conditions con - cern legal requirements for the takeover, such as merger control or FDI clearance). With regard to voluntary takeover offers, less rigid rules apply and bidders are generally free to define conditions that must be met for the offer to become effective, unless the satisfac - tion of these conditions is under their control (an offer made subject to revocation or with - drawal is inadmissible). Permissible conditions can comprise minimum acceptance conditions (ie, a certain percentage of shares must be ten - dered before the offer becomes effective) or MAC clauses, and regulatory clearance always remains a permissible condition. 6.5 Minimum Acceptance Conditions Minimum acceptance conditions are generally permissible in the public M&A context and often relate to the acquisition of 50% or 75% of vot - ing rights. In general, the resolutions of the sharehold - ers’ meetings of a German stock corporation are taken with a simple majority that exceeds 50% of the votes. However, for some important measures, particularly all measures that require an amendment of the articles of association, a majority that exceeds 75% of the share capi - tal represented in the shareholders’ meeting is required.
Even higher majorities are required for some measures, particularly regarding a squeeze-out of minority shareholders (see 6.10 Squeeze-Out Mechanisms ). Therefore, in some cases, bidders may consider even higher minimum acceptance thresholds than those previously covered. 6.6 Requirement to Obtain Financing No regulations apply in this regard in private transactions, while satisfactory commitment letters are usually required by sellers in a lever - aged transaction and the balance sheet of the purchaser is assessed. Financing-outs may also be stipulated as closing conditions. Before issuing a public takeover offer, the bidder is required to ensure that it has the necessary financial resources to fulfil the obligations to the shareholders who accept the offer. For a cash offer, the bidder must prove that suf - ficient funds are available by obtaining confir - mation from an investment service company (usually a bank). Therefore, the bidder cannot make a takeover offer that is subject to obtain - ing financing. 6.7 Types of Deal Security Measures In private M&A, deal security measures can be structured freely (subject to the corporate benefit test). In both private and public contexts, the conclu - sion of business combination agreements in the preparation of a transaction may conflict with the very strict rules of the Stock Corporation Act on the constitution of a stock corporation. The permissibility and enforceability of such agree - ments are debated in legal literature and depend heavily on the specific content of the agreement. Therefore, business combination agreements
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