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Anyone aiming for a takeover target in Germany should be aware of three hurdles
Financial Times (FT) October 22nd, 2019 – In the FT, Olaf Storbeck examines the reasons why takeover attempts by listed companies in Germany often fail. There are three particular hurdles. Firstly, the strong presence of employees on supervisory boards is proving to be a brake. This is because employees are usually hostile to takeovers. Second: If you want to control the cash flow of a company, you have to conclude a profit and loss transfer agreement. Such a profit and loss transfer agreement requires a 75 percent approval of the annual general meeting. Thirdly, minority shareholders are also strongly protected. After the takeover of AEG by Daimler, the compensation of minority shareholders dragged on for more than two decades. Anyone aiming for a takeover target in Germany should be aware of these particularities.
