The WpÜG governs both mandatory and voluntary offers for the acquisition of shares in target companies domiciled in Germany in the form of public cash or exchange offers. It is applicable to domestic companies whose shares are admitted to trading on a regulated market in Germany or an organised market of any other state of the European Economic area (target company).

The rules regarding making an offer are addressed to the offeror. An offeror can be a natural or legal person; the offeror can act by itself or in concert with others.

The WpÜG

• Ensures full transparency in the case of a takeover,
• provides for equal treatment of all shareholders of the target company,
• guarantees efficient offer procedures,
• governs ordinary acquisition offers, takeover bids and mandatory offers,
• governs the offeror’s consideration,
• provides guidelines for the board of management and the supervisory board of the target company and
• determines exemptions from the duty to make an offer.

Types of public offers (section 10 et seq. of the WpÜG)

• By making an "ordinary acquisition offer", the offeror intends either to acquire shares in the target company without attaining control or to extend its existing control position. Control is the holding of at least 30 percent of the voting rights in the target company. Minimum price rules do not apply. The WpÜG also allows partial offers.
• A "delisting offer", a particular case of the "ordinary acquisition offer", is made when an issuer seeks to revoke the admission to trading of their shares on a regulated market (section 39 of the BörsG). In such a case, the offeror must make an offer in accordance with the provisions of section 39 of the BörsG with an adequate cash compensation in euros. The target company itself can act as offeror, i.e. to buy back its own shares.
• If an offeror seeks to attain control of a target company, a "takeover bid" must be launched (section 29 et seq. of the WpÜG). The offeror must, among other requirements, offer shareholders an adequate consideration.
• A "mandatory offer" (section 35 et seq. of the WpÜG) must be made if an offeror attains control, other than through a voluntary takeover bid, in a target company for the first time. The offeror has a duty to make an offer to all remaining shareholders of the target company. In the event of a change of control, all shareholders are to have the opportunity to dispose of their stake at an adequate price.

Phases of an offer procedure

Phases of an offer procedure

Making an offer or attaining control

Whenever an offeror decides to make an offer or attains control (i.e. crosses the threshold of 30 percent), the offeror must publish the decision to make an offer or attainment of control subsequently on the internet and through an electronic information dissemination system. Both BaFin and the stock markets where shares and derivatives of the offeror or the target company are admitted to trading must be informed immediately. For this purpose, BaFin provides the specialised procedure "Company Takeovers (WpÜG)" on the MVP Portal.

Decisions to make ordinary acquisition offers (section 10 of the WpÜG), delisting offers (section 39 of the BörsG, section 10 of the WpÜG), takeover bids (sections 29, 34 and 10 of the WpÜG) and mandatory offers (section 35 of the WpÜG) are published on the BaFin website.

List of published decisions (only available in German).

Submission of the offer document

The offeror has a duty to prepare and submit an offer document to BaFin within a period of four weeks following the publication of the decision to make an offer or of the attainment of control.

The offer document must be prepared in German. It must provide information regarding the offer (offeror, type and amount of consideration), the shares (in the case of an exchange offer), the financing of the offer, the offeror's financial position, financial performance and earnings position after the offer, the offeror’s stake in the target company and the offeror's intentions with regard to the future business of the target company and its employees.

In the case of takeover bids and mandatory offers, shareholders of a target company should be able to decide based on the information given in the offer document if they want to accept or decline the offer.

Examination of the offer document by BaFin

Following the submission of the offer document, BaFin verifies that the information given is consistent with the requirements of the WpÜG. Furthermore, BaFin examines whether the required information is complete and ensures it does not contain evident infringements of the WpÜG and its regulations. BaFin has a period of ten working days to complete its examination. Within this period, it is entitled to either permit or prohibit the publication of the offer document. If the offer document is incomplete or otherwise fails to comply with the provisions, before prohibiting the offer BaFin may grant the offeror up to additional five working days to make corrections.
BaFin also prohibits an offer if the offeror fails to prepare and submit an offer document within the given time period.

List of published offer documents pursuant to section 14 of the WpÜG (only available in German).

Offer period

Under section 14 (2) of the WpÜG the offeror must publish the offer document on the internet without undue delay once BaFin grants its permission. Furthermore, the offeror must either publish the entire offer document in the electronic Federal Gazette (elektronischer Bundesanzeiger) or make it available for distribution free of charge at a suitable agency in Germany. In the latter case, the offeror must announce the agency (including its address) holding the offer document in the electronic Federal Gazette. This should guarantee that all shareholders are able to take note of the offer document.

The offeror also has a duty to transmit the offer document to the board of management of the target company and the employees of the offeror, if possible via the competent works council, without undue delay following its publication. Furthermore, the board of management of the target company must transmit the offer document to the competent works council or, where there is no such works council, to the employees directly without undue delay. The board of management and the supervisory board of the target company must, and the competent works council may, issue a substantiated statement regarding the offer on the internet and in the electronic Federal Gazette.

The acceptance period commences upon publication of the offer document. Within this period, shareholders of the target company can accept the offer. The period for acceptance of the offer may be no less than four weeks and no more than ten weeks and may be extended. In the case of takeover bids, shareholders of the target company who have not accepted the offer may accept the offer within two weeks after the end of the acceptance period and announcement of the results of the offer. If an offeror – following a takeover bid or mandatory offer – holds at least 95 percent of the voting share capital, ordinary shareholders of the target company may accept the offer within three months after the end of the acceptance period and the respective announcement. Preference shareholders are also entitled to this sell-out right if the offeror holds at least 95 percent of the target company's share capital following a takeover bid or mandatory offer.

Within the acceptance period, the offeror has a duty to publish the acceptance rate of the offer on the internet and in the electronic Federal Gazette frequently – weekly until the start of the final week of the acceptance period and daily in the final week. Furthermore, the offeror must publish the outcome of the offer without undue delay following the end of the acceptance period and, in the case of takeover bids, the additional acceptance period. If the offeror reaches 95 percent of the share capital or the voting share capital, it also has a duty to announce this.

The offer process ends when the acceptance period is over and the consideration offered is exchanged for the shares. If the offeror has made the offer subject to regulatory conditions, for example approval by antitrust authorities, the settlement of the offer and payment of the offer consideration may be postponed for up to one year.

Exemption from the duty to make an offer

Upon written application, BaFin shall permit the non-consideration of voting rights (section 36 of the WpÜG) or may exempt the offeror from the duty to publish the attainment of control and to make a mandatory offer (section 37 of the WpÜG).

If such permission is granted, the offeror is not required to make a mandatory offer to all outstanding shareholders of a target company. Examples of such cases might include the non-consideration of voting rights in the case of an attainment of control due to restructuring within a group of companies or the so-called financial restructuring exemption (section 9 sentence 1 no. 3 of the WpÜG Offer Ordinance), in which an offeror may be exempt from the duty to make a mandatory offer if the attainment of control is the result of a financial restructuring of the target company.

List of published exemption decisions (only available in German)