Mergers and acquisitions in Germany: Social-setting and regulatory framework
The paper describes the legal and economic environment of mergers and acquisitions in Germany and explores barriers to obtaining and executing corporate control. Various cases are used to demonstrate that resistance by different stakeholders including minority shareholders, organized labour and the government may present powerful obstacles to takeovers in Germany. In spite of the overall convergence of European takeover and securities trading laws, Germany still shows many peculiarities that make its market for corporate control distinct from other countries. Concentrated share ownership, cross shareholdings and pyramidal ownership structures are frequent barriers to acquiring majority stakes. Codetermination laws, the supervisory board structure and supermajority requirements for important corporate decisions limit the execution of control by majority shareholders. Bidders that disregard the German preference for consensual solutions and the specific balance of powers will risk their takeover attempt be frustrated by opposing influence groups.
|Date of creation:||2003|
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- Franks, Julian & Mayer, Colin, 2001.
"Ownership and Control of German Corporations,"
Review of Financial Studies,
Society for Financial Studies, vol. 14(4), pages 943-977.
- Julian Franks & Colin Mayer, 2001. "Ownership and Control of German Corporations," OFRC Working Papers Series 2001fe11, Oxford Financial Research Centre.
- Franks, Julian R & Mayer, Colin, 2001. "Ownership and Control of German Corporations," CEPR Discussion Papers 2898, C.E.P.R. Discussion Papers.
- Kenji Kojima, 2000. "Commitments and Contests: a Game-Theoretic Perspective on Japanese Vertical Relationships," Discussion Paper Series 110, Research Institute for Economics & Business Administration, Kobe University.
- Boehmer, Ekkehart, 2000. "Business Groups, Bank Control, and Large Shareholders: An Analysis of German Takeovers," Journal of Financial Intermediation, Elsevier, vol. 9(2), pages 117-148, April.
- Ekkehart Boehmer, 1999. "Business Groups, Bank Control and Large Shareholders: An Analysis of German Takeovers," Working Papers 1999.20, Fondazione Eni Enrico Mattei.