Germany: Germany's New Merger Control Regime – New Filing Requirements To Come

Last Updated: 28 April 2017
Article by Andreas Grünwald and Jens Hackl

Most Popular Article in Germany, April 2017

Germany is about to enact a revised merger control regime which will result in extended filing requirements in Germany for M&A deals. The new law will likely come into force in Q2 of 2017. It is part o f a major amendment to the German Act Against Restraints of Competition (ARC) (Gesetz gegen Wettbewerbsbeschränkungen). To a certain degree such reform is driven by requirements to harmonise German law with EU standards in the area of cartel damage claims and cartel enforcement. Also, it will adjust the German competition law framework to address some of the challenges that come with big data innovation, two-sided markets, and the digital economy more generally. From an M&A perspective, however, the most relevant element of the reform is the change to the thresholds that a transaction engenders in order to trigger merger clearance requirements as overseen by the German Federal Cartel Office (FCO) (Bundeskartellamt).

Today, German merger control follows a purely revenue-based approach to determine whether a proposed transaction is reportable for mandatory FCO clearance. Both parties must have combined worldwide revenues of more than EUR 500 million; one party to the transaction (e.g., the buyer) must have German revenues of more than EUR 25 million; and another party (e.g., the target) must have German revenues of more than EUR 5 million.

Going forward, these revenue thresholds will remain in place and, if a transaction meets all three of them, it will continue to be reportable on these grounds. But now, in addition, the new law introduces a transaction value test to capture transactions that only meet the higher of the two domestic thresholds, i.e., if the target has less than EUR 5 million in German revenue. These transactions shall now also require FCO clearance if (a) the transaction value exceeds EUR 400 million (to be determined on the basis of the purchase price as stipulated as cash compensation or in another form); and (b) the target has significant business in Germany, as demonstrated, for example, by a strong domestic customer base or substantial domestic R&D activities (the "local nexus test").

The purpose of this adjustment is to capture transactions that may not (yet) be sizable by revenue standards, but that may nevertheless have a competitive impact, e.g., because they concern some innovative startup firm. According to the new law's official reasoning, which explicitly refers to the Facebook/WhatsApp merger in that respect, it is this type of transaction that triggered the introduction of the additional transaction value test.

This supplemental transaction value test, however, adds uncertainty to M&A deals that affect Germany, as it is more complex than the existing revenuebased filing thresholds. Even where the lower domestic revenue threshold is not met, the parties to a transaction will still have to apply further efforts to determine whether the transaction value threshold is nonetheless reached, and whether significant business in Germany exists. At least until some further FCO guidance is available on the new local nexus test, we will expect to see more German filings even in smaller cases, because the merging parties will want to mitigate any potential risk of violating filing requirements and avoid jumping the gun.

With the new filing thresholds, as with the existing ones, it should be noted that German merger control does not only apply to transactions that result in a change of control over a target company. As long as the revenue thresholds are met (or, going forward, the transaction value test), even the acquisition of a minority shareholding in the target company would by necessity be reportable to the FCO, provided that the buyer acquires at least 25% of the capital or voting rights or otherwise gains relevant competitive influence over the target business.


France, Germany and Italy Propose EU-Wide Restrictions on Foreign Investments

The three European Union (EU) and Eurozone members, France, Germany and Italy, in a joint proposal addressed to the EU Commissioner for Trade, Cecilia Malmström, have added an initiative for ensuring an improved level playing field in trade and investment to the EU Commission's agenda.

In their joint letter, the three countries stress that they are "worried about the lack of reciprocity" and about a potential selling off of European know-how and expertise, which the EU and its Member States "are currently unable to combat with effective instruments." The initiative explicitly refers to the takeover by non-EU investors in the last few years of "more and more European companies with key technological competences for strategic reasons." The proposal apparently aims to establish a review regime that would allow for restricting acquisitions that are directly or indirectly steered or financed by non-EU governments.

More information about the joint proposal can be found here.

MoFo will update you on this initiative once more details become available. If you have any queries on this matter, please contact , Morrison & Foerster, Germany.


Below we highlight for you some of the noteworthy transactions involving Europe that may provide you with valuable insights into recent trends or developments.

ARM acquired by SoftBank

Tokyo-based SoftBank acquired Britain's most valuable technology company ARM for USD 32 billion in cash. ARM, the manufacturer of semiconductor and software design technology that is used in nearly all smartphones, will play a central role in the shift in the so-called "Internet of Things." SoftBank agreed to pay 1,700 pence per share, which is a premium of approx. 41.1% on the all-time high closing price in March 2015, and approx. 43.0% on the closing price as of 15 July 2016. This deal constitutes not only one of Japan's biggest overseas ventures, but also the largest takeover to date by SoftBank. Also, the deal is considered the largest ever cash investment from Asia into the UK and is the first large-scale M&A deal following the Brexit vote.

A cross-office team of MoFo acted as lead counsel, including attorneys from Tokyo, London, Washington D.C., Berlin and Brussels.

New stakeholders for mapping and navigation provider HERE

Tencent, one of the leading providers of Internet valueadded services in China and as part of an investor consortium including NavInfo and GIC, acquired a 10% stake in Here, a leading global online mapping and navigation provider with well-known German car manufacturers as shareholders. Offering realtime mapping and navigation information to the user is considered to be key technology for autonomous driving. With the acquisition of the mapping provider and by forming a joint venture, the car manufacturers intend to reduce their dependence upon Apple and Google in the area of navigation and assistance systems. The car manufacturers in the joint venture have all recently announced their strong intentions and commitment to autonomous driving.

Tencent was represented by a cross-office team from MoFo, including partners from Hong Kong and Berlin.

Buffett to invest again in German "Mittelstand"

Warren Buffett continues his shopping tour in Germany following his announcement in October 2015: Precision Castparts Corporation, a subsidiary of the holding company Berkshire Hathaway owned by Buffett and specialised in the supply of complex parts in the aircraft and oil industry, reached an agreement for the takeover of Germany-based Wilhelm Schulz GmbH, a global leader in manufacturing accessory parts in pipes, with a sales revenue of EUR 172 million in 2014 and 450 employees. The deal is considered to be an ingenious transaction. The stainless steel parts of Wilhelm Schulz are in great demand in the oil industry, where there is a huge demand for corrosion resistant pipe accessories and valves (especially in the Middle East) in order to ensure long-term operations with sulfurous crude oil in the future. The U.S. subsidiary Schulz Xtruded Products, a manufacturer of seamless stainless steel pipes and raw materials for the aviation industry, is also part of the transaction. The details of the transaction are not disclosed and the deal is pending regulatory approval by the Federal Cartel Office in Germany. However, if the deal is successfully concluded, it would constitute the second acquisition of Warren Buffett after the takeover of Hamburg-based motorcycle parts company Louis for EUR 400 million. During the shareholder meeting in May 2016, Buffett declared that he would acquire at least one more company in Germany by 2020, and emphasised again his strong interest in German midsize companies as "hidden champions."

Johnson & Johnson to acquire Swiss Actelion

U.S. pharmaceutical company Johnson & Johnson successfully reached an agreement for the acquisition of Actelion, a Switzerland-based biotechnology company manufacturing drugs for a life-threatening disorder, characterised by high blood pressure in the pulmonary circulation system. The target had a sales revenue of CHF 2 billion and a return of approximately CHF 552 million. Analysts assume an annual sales revenue to the tune of CHF 4.6 billion from the company's two drugs, Opsumit and Uptravi, by 2020. The deal is said to have a volume of USD 30 billion, by offering CHF 280 per share in cash, a 23% premium compared to the last market price, and is considered to be one of the biggest deals in the pharmaceutical field since the beginning of 2016. The deal structure provides for the spin-off of Actelion's research business with the aim to list the new company on the Swiss stock exchange, SIX. Shareholders of Actelion are offered shares in the new company, and Johnson & Johnson will also hold a stake of 16%, with the possibility to acquire an additional 16% by exercising a convertible bond option.

Linde and Praxair to become world's biggest group for industrial gases

Linde, Germany's biggest supplier of industrial gases, and its competitor Praxair, the U.S. leading supplier of industrial gases, reached an agreement for a merger to become the world's largest industrial gas group. The deal structure provides for the formation of a new holding company with a listing in both Frankfurt and New York. Shareholders of both companies will receive half of the stakes in the new company. The combined sales revenue of the two companies would be EUR 28 billion and would have a market value of EUR 61 billion. The merger is expected to have synergy effects in the amount of up to USD 1 billion. The deal is pending and will require both shareholders' and regulatory approval.

SmartRecruiters acquires Berlin-based startup

SmartRecruiters, a U.S. company based in Silicon Valley, has acquired Berlin-based startup Jobspotting, a platform offering suitable job openings using big data. The transaction is likely to create synergies. SmartRecruiters collaborates with employers providing software solutions to find talented employees whilst Jobspotting, on the other hand, supports job seekers. After the creation of a profile on the platform, the self-learning algorithm filters job openings from other common job exchanges. With the merging of the two technologies, employers and companies will more easily find the right candidate for the position. Details of the transaction have not been disclosed.

General Motors to sell its car manufacturing subsidiaries in Europe

U.S. car manufacturer General Motors Inc. reached an agreement for the sale of its car manufacturing subsidiaries Opel (Germany) and Vauxhall (UK) to French Peugeot S.A. for an aggregate of EUR 1.3 billion. In addition, Peugeot agreed to acquire the European operations of GM Financial for EUR 900 million. The turnover from operations of Opel and Vauxhall amounted to EUR 17.7 million in 2016. After the merger, Peugeot will become the second largest car manufacturer in Europe with a market stake of 17%. The transaction is pending, will require both governmental and regulatory approval and is expected to be closed by the end of 2017.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions