GERMANY: Value Based Merger Control Threshold Introduced

Monday April 10 2017

On 31 March 2017, the German Government passed the 9th amendment of the German Competition Act (GWB). The amendment predominantly concerns the transposition of the Antitrust Damages Directive (2014/104/EU) (EU Damages Directive). However, it also introduces other important measures, including; a new value-based merger control threshold and the legal succession regarding penalties similar to the size of transaction test in the USA.

Merger Control Rules

A value based threshold has been introduced to protect against mergers, where the turnover would not ordinarily warrant a filing but the market presence of the parties involved in the merger would e.g. Facebook/WatsApp, pharmaceutical and tech markets where products have been protected but a revenue stream is not yet being generated.

A notification shall become necessary if current German merger control thresholds are not met (including a domestic turnover of EUR 5m) and:

• the combined worldwide turnover of the participating undertakings is more than €500m;
• one participating undertaking had a turnover of more than €25m in Germany in the last business year prior to the concentration;
• neither the undertaking to be acquired nor another participating undertaking had a turnover of more than €5m in Germany in the last business year prior to the concentration;
• the value of the consideration for the concentration is more than €400m; and
• the undertaking to be acquired is active to a significant extent in Germany.

The new notification threshold is supplemented by a calculation rule to determine the consideration which shall encompass all payments and other monetary benefits received by the seller from the acquirer concerning the concentration and the value of the debt assumed by the acquirer.

For more information, please click the link at the top of the page.