German Merger Control Rules May Change: More Transactions Could Be Exempt from Filing
Fewer transactions will require notification in Germany if a recent lower court decision holds up. The court that reviews Federal Cartel Office (FCO) decisions, the Düsseldorf Higher Regional Court, recently broadened the “de minimis exception” to the rule that the parties to any transaction that causes effects in Germany must seek FCO approval before closing. As a practical matter, almost any sizeable purchaser with €25 million in German sales must get FCO approval prior to closing, when a target has even trivial sales in Germany.
The de minimis exception exempts transactions from filing when total sales in the relevant market are less than €15 million. The FCO defines “total sales” as including all European (or worldwide depending on the relevant geographic market) sales, making it difficult for parties to take advantage of the exception. The Düsseldorf court disagreed, holding that the exception applies when German sales in the relevant market are less than €15 million. This would extend the benefit of the exception to far more transactions. The FCO has said that it will appeal the decision to the Federal Court of Justice, Germany’s highest court.
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