Regardless of whether the sale of a company results in the creation or intensification of a market dominant position, the Federal Cartel Authority is not able to reject such a merger under =A7 24, para. 8 of the German Restrictive Practices Act if one of the three immateriality prerequisites apply. These immateriality prerequisites are valid if

  • the worldwide sales of the buyer in its previous financial year were less than DM 500 million;
  • the worldwide sales of an independent company in its previous financial year were less than DM 50 million;
  • the mergers related to a market with sales of less than DM 10 million in the previous calendar year.

A company sale may nonetheless be invalid due to a breach of =A7 1 of the German Restrictive Practices Act even if the limits of the immateriality clause as defined in =A7 24, para. 8 of the Restrictive Practices Act are not exceeded. =A7 1 of the Restrictive Practices Act forbids a restriction of competition if the prevailing circumstances on the relevant market are materially affected as a result or if the prevailing circumstances are completely eliminated. This situation only arises on regional markets in most cases if the limits of the immateriality clause as defined in =A7 24, para. 8 of the Restrictive Practices Act are not exceeded. For example, if company A is sold to company B and if competition in the relevant regional market is materially affected or completely eliminated as a result, there is no market dominant position within the meaning of =A7 24, para. 1 of the Restrictive Practices Act but there is a breach of =A7 1 of the Restrictive Practices Act. Such company sale is then invalid due to a breach of =A7 1 of the Restrictive Practices Act.

For further information please contact Dr Erich Michel, Wessing Berenberg-Gossler Zimmermann Lange, Freiherr-Vom-Stein-Strasse 24-26, Frankfurt am Maim 60323, Frankfurt, Germany- Tel: +496 997 1300, Fax: +496 997 130100.

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