GERMANY Trends and Developments Contributed by: Carsten Berrar and Peter Klormann, Sullivan & Cromwell LLP
financing conditions, there is reason for cautious optimism. Public M&A market Public-to-private trend Public takeover transactions aimed at the del - isting of the target company ( “P2P” or “public- to-private” ) are subject to complex regulatory, procedural and disclosure requirements, which distinguish them from private M&A transactions. Moreover, obtaining full control over a publicly listed company and accessing its assets and cash flows in Germany can be more challeng - ing than in other jurisdictions, even if the bidder acquires a majority share. Nevertheless, finan - cial investors are increasingly considering pub - lic takeovers of listed companies. Private equity funds in particular have become well versed in the nuances of German takeover laws and are increasingly interested in the opportunities pre - sented by (undervalued) listed targets. The German takeover regulator (BaFin) approved 32 offer documents for public transactions in 2024, which is approximately one third more than in 2023. Of all offers approved by BaFin in 2024, the number of takeover offers remained stable compared to 2023. The year ended with a significant transaction in the online fashion and wider e-commerce industry: the (pending) public takeover offer that DAX company Zalan - do launched for its competitor ABOUT YOU in December. For a delisting, German law requires a (second) public acquisition offer for all remaining shares to be launched. Such delisting offers have become a common tool for bidders to increase their stake, with the aim of reaching full owner - ship and control at the “back end” via a squeeze- out. The number of delisting offers continued to increase in 2024 and is now almost four times
higher than in 2022, according to reports (exam - ples in 2024 included TLG/WCM, Novartis/Mor - phoSys, Telefónica/Telefónica Deutschland and Silver Lake/Software AG). Public-to-merger transactions In other instances, bidders have used a merger transaction in order to achieve full integration after the initial takeover offer (eg, Dutch com - mercial real estate developer CTP following its successful offer for Deutsche Industrie, REIT in 2022). In Germany, a merger is possible with a 75% majority in the target’s shareholder meet - ing, whereas a squeeze-out requires at least 90% ownership. Despite the lower threshold and in contrast to the practice in the US, a merger component is less common in German public M&A, because of shareholder litigation com - plexities and other restrictions. Since some of the concerns were removed through the reform of the German Transforma - tion Act in connection with the transposition of the EU Mobility Directive in 2023, mergers have become more relevant in transaction structuring. One significant example in which the new legal framework was utilised is Schaeffler’s acquisi - tion of Vitesco via a public tender offer and sub - sequent merger, which was successfully com - pleted in 2024. This merger was the first merger of two listed companies under the new regime. The favourable changes in the legal framework may well lead to an increased number of “public- to-merger” or “P2M” transactions in Germany over the next few years. Negotiated and unsolicited takeovers In Germany, most public takeovers are announced as “friendly” transactions based on negotiated agreements with the target com - pany. These negotiations are often initiated by an interested bidder, who may or may not be
745 CHAMBERS.COM
Powered by FlippingBook