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.
You may also wish to read through related Wessing Berenberg-Gossler Zimmermann Lange. You can view the entire archive via the Internet on Business Monitor Online (http://www.businessmonitor.co.uk), or via your online provider by entering "Wessing Berenberg-Gossler Zimmermann Lange" and "Business Monitor" as a free text search.
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