Topic Company takeovers Company takeovers
Three different procedures apply to takeover bids for listed companies. The Securities Supervision Directorate of BaFin has been monitoring these since 2002. In principle, the supervision covers domestic companies that are listed on a stock exchange in Germany.
Since 2002, BaFin's Securities Supervision Directorate has been responsible for monitoring takeovers of companies whose shares are admitted to trading on a regulated market. In principle, its supervisory tasks extend to all domestic companies that are listed on a stock exchange in Germany. There are three offer/bid procedures: ordinary acquisition offers, takeover bids and mandatory offers.
In the case of ordinary acquisition offers, offerors either want to buy shares without acquiring control of the company or want to increase the controlling position they already hold. No minimum price is prescribed for this; partial offers are also permitted. Control is the holding of at least 30% of the voting rights in the target company.
In the case of takeover bids, bidders want to buy so many shares in the target company that they reach or exceed the control threshold. They can make their bids conditional upon achieving a sufficient percentage for them to declare the bid successful, but must offer minimum prices based on the volume-weighted average price over the previous three months and any price paid to possible prior purchasers.
Mandatory offers have to be made by offerors to all other shareholders when they acquire control of the company for the first time. Minimum price rules apply in these cases, too.
Procedure pursuant to the WpÜG
BaFin's Securities Supervision Directorate monitors the takeover procedures. It checks that the offer documents are complete and do not contain obvious infringements of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs und Übernahmegesetz – WpÜG). It may prohibit a bid if necessary. It also decides on applications for exemptions.
BaFin is supported in its activities by an Advisory Council, which is made up of representatives from business, politics and science and advises BaFin on issues regarding takeover legislation. An Objections Committee, also based at BaFin, rules on objections to particularly significant supervisory decisions relating to takeover legislation.
The WpÜG also lays down the obligations which must be fulfilled by bidders, how BaFin monitors the procedures and which information BaFin is required to publish.
updated on 01.04.2016