and the Federal Cartel Office is notified of the planned transaction, and it does not prohibit it. Therefore, the potential buyer (or her/his advisors) will also have to closely examine the applicability of anti-trust regulations in preparation for the sale and transfer agreement.

Provided that certain turnover thresholds are met, some transactions may fall under the remit of the EU Commission for merger approval instead of the German Federal Cartel Office. The process is, in principle, similar on the European level. Furthermore, businesses which are active in several countries may require merger control approval in all such countries, which can require serious efforts of the antitrust specialists involved.

At completion, the bank providing the debt financing often requires collateral from the target group.

4.4.3  Other Regulatory Matters

Depending on the business sector of the target, the acquisition—in particular when done by way of an asset deal—may require additional public approvals. In the case of an asset deal, some public permits will automatically transfer to the new owner, i.e. the buyer, but others will not. Some branches such as banks and financial institutions will need to have their shareholders approved by the regulator, which means that a buyer has to get approval prior to acquiring the relevant business. Buyers from outside Germany may in theory be blocked if the acquisition poses a threat to public order and security—but in practice, no acquisition has ever been blocked on these grounds.

4.5  Introduction to Public Takeovers

We would like to conclude our outline on corporate acquisitions in Germany with a brief introduction to public takeovers, i.e. the German legal regime for takeovers of publicly listed companies. Public takeovers in Germany are regulated by the SecuritiesAcquisition and TakeoverAct (WpÜG, Wertpapier- und Übernahmegesetz, hereinafter ‘Public Takeover Act’), which came into effect on 1 January 2002. In 2006, Germany passed amendments to the PublicTakeoverAct when implementing the EUTakeover Directive1.Among other things, the German implementation regulation permits target companies to opt in to the EU rules on the prohibition of frustrating actions (i.e. any action of the management board or the supervisory board which could prevent the success of the offer), and introduced new takeover-related squeeze-out and sell-out procedures. Minor amendments, especially regarding the

1  Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids, OJ L 142/12 as of 30April 2004.