Mergers & Acquisitions. Corporate Restructuring

Mergers & Acquisitions. Corporate Restructuring

EDIFICIA Lawyers is known for its unbiased advice to senior managers of foreign companies who have targeted a German company for a potential merger or acquisition opportunity.

Our clients are usually smaller to medium sized companies (SME) looking for investments into Germany. At the end of a due diligence process, we are equally open to recommend, as well as to warn against, such a transaction.

The Firm’s services include the usual aspects:

  • Carrying out a legal and tax due diligence prior to any merger or acquisition (we closely cooperate with tax consultants and have access to German Company Search Agencies)
  • Drafting the required Mergers & Acquisitions documents incl. agreements for the

transfer and assignment of shares in a German GmbH (Share Deal) or for the transfer of goods and good will of a company (asset deal)

  • Negotiating and entering into agreements with individual employees and/or with the Works Council
  • Preparing documents required for any an shareholders’ resolution in Shareholders’ meeting
  • Negotiating and drafting arrangements with senior management, e.g. resignations or fixed term services agreements
  • Negotiating and drafting agreements with minority shareholders

Thanks to a long-term positive global economic environment, German companies appear to be increasingly attractive to foreign investors. The opportunities for a company merger or an acquisition comprise all sectors of German industry from the high-tech automotive supplier to environmental technology companies and the food processors. Property Portfolio Companies may be added to the list.

Although foreign companies are generally granted the same access to public institutions and funding as German companies, e.g. no need of a minimum percentage to be granted to German shareholders, it is essential to carefully look into each individual case and to carry out proper research and due diligence before making any investment.

The relevant corporate rules to be considered in an Mergers & Acquisitions deal are essentially:

  • Private Limited Liability Company Act (GmbHG);
  • Public Company Act (AktG);
  • Commercial Code (HGB) and
  • Civil Code (BGB).

Statutory employment rules and regulations as well as relevant case law and employment law precedents relating the transfer of a business.

The most important laws in tax matters are the Corporate Income Tax Law, the Individual Income Tax Law, and related laws and implementation regulations.

Although there are merger control regulations in place, such as the Foreign Trade and Payments Act (AWG) and the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung – AWV) as well as the Act against Restrictions of Competition (ARC), most acquisition fall outside the threshold. In some case, there are notification requirements, which form part of the acquisitions process.

Not least because of the complexity of the German tax system it is indispensable to take professional advice. Edificia Rechtsanwälte would be pleased to assist.

Mergers & Acquisitions. Corporate Restructuring.