Jens Steger Analyzes the German Bundeskartellamt’s New Guidelines on Foreign-to-Foreign Mergers in Der Betrieb
Associate Jens Steger analyzed the German Bundeskartellamt’s recently published revised guidance paper on "Domestic Effects in German Merger Control" in the German legal magazine Der Betrieb. The guidance paper aims to provide more legal certainty for mergers between companies based outside Germany by helping these companies determine whether a proposed merger has so-called “domestic effects” within Germany and is therefore subject to a merger control notification with the Bundeskartellamt. Generally, German merger control law applies to all mergers having a “significant effect” within Germany, even if the merger itself only happens abroad. The new guidance does not amend German statutory law, but specifies which effects on the German market qualify as significant enough to trigger a notification requirement according to the Bundeskartellamt. In his analysis, Steger notes that several typical M&A constellations, such as private equity transactions and joint venture activities, appear not be covered by the new guidance; those M&A activities should always be viewed in the light of international (and German) merger control law if the transaction triggers a merger control notification. If companies misjudge the need for a merger control notification with the Bundeskartellamt, the authority can issue high fines to the companies and declare the M&A contracts invalid until the final clearance decision of the authority.