Germany’s energy and infrastructure M&A market over the past 12 months has been resilient, albeit more selective. Overall volumes eased slightly versus the prior 12 months, but pricing held for high-quality, income-predictable assets. Buyer focus shifted toward platforms with visible pipelines, grid-adjacent businesses, and assets with contracted or regulated cash flows. Processes took longer, yet completion rates remained high where regulatory paths and bankability were clear.

Market Headwinds and Tailwinds

Higher base rates and equipment cost inflation compressed debt capacity and pushed more equity into transactions. Sponsors leaned on hybrid capital, deferred consideration and earn-outs to bridge valuation gaps. At the same time, easing supply-chain bottlenecks and stabilising power-price expectations improved underwriting confidence.

Russia’s war in Ukraine kept energy security front of mind, sustaining appetite for domestic production, flexibility, grid, and gas system resilience. The energy transition is now viewed not only as a pathway to achieving net zero but also as an instrument to achieve energy security. Events in the Middle East, coupled with broader trade tensions, have introduced further price volatility in commodities and equipment. Germany’s strategic response – accelerating renewable energy deployment, storage capacity, and grid expansion – has reinforced the long-term investable landscape. Consequently, capital has increasingly shifted towards assets that strengthen system adequacy and reduce reliance on imports.

Germany in a Global Context

In comparison with global energy and infrastructure M&A activity, Germany mirrored the broader European slowdown in overall transaction volumes but outperformed in the renewables-plus-flexibility and regulated network segments. In essence, the German market neither experienced a boom nor a downturn; instead, it consolidated around policy-anchored investment themes.

Platform Over Project

Buyers prioritised platform acquisitions and carve-outs that bundle development, construction and O&M capabilities. This improves control over capex timing, connection queues, and procurement, while giving sellers partial exits with upside via earn-outs.

Hybrid Equity and Structured Capital

Hybrid equity continued to gain traction, typically in the form of minority stakes with enhanced governance, regular or preferred equity with downside protections, and JV vehicles that keep incumbents in operational control. These structures reduce FDI friction and preserve unbundling compliance while unlocking growth capex and/or allowing issuers to deleverage. They also match asset profiles, such as regulated networks and availability-style revenue models, with investors seeking yield and capital preservation.

Hydrogen and CO₂ Midstream Emergence

Hydrogen core-network planning and enabling steps for CO₂ transport and offshore storage turned from strategy into concrete network development plans, letters of intent and potential transactions. Investors began considering tariff models, third-party access, repurposing liabilities, and cross-border interfaces.

Business Approach and ESG

Boards treated decarbonisation as a core value lever rather than a compliance task. Diligence expanded to include curtailment exposure, redispatch costs, biodiversity and water use, alongside traditional construction and offtake risk. This heightened rigour was reflected in contingent pricing, stricter conditions precedent, and post-close capex governance that ties ESG commitments to financing margins.

Germany’s energy and infrastructure M&A market remains highly attractive to a diverse group of investors, driven by the country’s energy transition goals, regulatory support, and demand for inflation-protected assets.

How Investors Enter

Investors used four principal routes:

• platform acquisitions of developers or IPPs, often with vendor reinvestment to secure pipeline continuity;
• minority stakes in regulated or strategic assets with robust consent rights and information packages (including by way of structured equity with modified return profiles);
• (sometimes multi-party) joint ventures for large projects, common in offshore wind, storage portfolios and district heat, balancing industrial know-how and financial firepower; and
• farm-downs at notice-to-proceed or early operations to recycle sponsor capital.

Who the Investors Are

The investor landscape includes European utilities, major global energy players pivoting to electricity and renewables, and infrastructure funds with long-dated capital. Pension and insurance investors sought minority positions in networks, heat, and mature generation. Private equity focused on build-to-core strategies in distributed energy, EV charging, and flexibility platforms. Public actors, such as municipal utilities and development banks, co-invested selectively in grids, heat and hydrogen corridors, anchoring blended-finance stacks.

Main Types and Sizes

In relation to energy generation assets, offshore wind remained the flagship, with individual projects commonly close to or around the 1 GW range and multi-billion-euro capex tied to HVDC grid connections. Onshore wind and utility-scale solar advanced through larger portfolio packages, often 300–800 MW per transaction across multiple sites. Storage scaled rapidly: utility BESS clusters aggregated 200–600 MW per platform, with single nodes reaching 100–200 MW/200–400 MWh as market access clarified.

Hydrogen and CO₂ Infrastructure

Hydrogen backbone planning targeted industrial clusters, salt-cavern storage and port connectors, mixing repurposed gas lines and newbuild corridors. Early-stage projects envisaged electrolyser hubs from 100–400 MW near coastal import points and industrial offtakers. CO₂ transport moved toward licensable corridors and offshore storage access, with pilot-scale capture projects bundling shipping, pipeline, and storage contracts. These midstream assets are now treated as regulated businesses, making them natural candidates for hybrid equity and joint venture ownership.

Conventional and Renewables Mix

The investment balance tilted decisively toward renewables and enabling infrastructure. New gas-fired flexibility was scoped to support adequacy, with tenders framed around availability and optional conversion rather than fixed hydrogen-ready mandates. LNG import capacity stabilised as transitional infrastructure, with conversion pathways to low-carbon molecules under evaluation. The bulk of private capital nonetheless pursued renewables, grids, storage, heat and digital-energy intersections, where policy signals and long-term demand were strongest.

The most popular legal forms are the limited liability company (GmbH), which requires a minimum share capital of EUR25,000, half of which must be paid in at incorporation, and the so-called entrepreneur company (UG), a simplified GmbH that can be started with as little as EUR1. Hybrid structures such as the limited partnership (GmbH & Co. KG), where a GmbH acts as the general partner, are also used, particularly for balancing management control and liability. The incorporation process typically takes two to four weeks and involves notarising articles, opening bank accounts, and registering with commercial and tax authorities.

Beyond incorporation, early-stage ventures must carefully address sector-specific challenges such as permitting and complying with regulations. Financing is generally staged, with venture capital supporting initial development and infrastructure or private equity funds stepping in as projects mature and regulatory risks diminish. Public funding from KfW or EU programmes often helps to de-risk investments.

While Germany has traditionally been dominated by large utilities and infrastructure operators, early-stage ventures are becoming more common, particularly in clean tech, distributed energy, and hydrogen clusters, often in partnership with corporates or municipal utilities.

Typical liquidity events for early-stage energy and infrastructure companies in Germany include initial public offerings (IPOs) and strategic acquisitions by utilities, infrastructure investors, or industrial players seeking to scale energy transition capabilities or, on the debt side, trough HoldCo financings or hybrid equity instruments.

Secondary sales to infrastructure or private equity funds are also common once the venture reaches regulatory maturity or achieves commercial viability. For companies pursuing a build-and-hold strategy, an IPO might be an attractive option to raise funds for long-term expansion and operation, although it leads to a much higher level of transparency and a stricter corporate and regulatory framework. A popular transaction model is the “farm-down”, where a project developer, after commissioning, divests a portion of its equity while often retaining operational involvement and marketing the generated electricity through power purchase agreements (PPAs).

Key considerations for founders and investors include ensuring regulatory compliance and securing bankable permits, as these significantly affect valuation and buyer interest. Founders should consider careful preparation of any transaction, governance rights, and anti-dilution protections early on, while investors will focus on business cases, contracted or regulated revenue streams, and stability of the regulatory environment. Founders and investors in a sale scenario should be aware of transaction terms, which in recent months have shifted towards a more buyer-friendly landscape.

Spin-offs are customary and can be utilised as an alternative to asset deals in Germany’s energy and infrastructure sectors. Their key drivers stem from the complexity of asset-by-asset transfers, particularly when a company seeks to dispose of only a portion of its assets without transferring the entire business. A spin-off offers the significant benefit of simplifying this process by forming a new entity into which the relevant assets are transferred by operation of law, thereby generally eliminating the need to seek consent from counterparties before transferring each individual contract. The buyer can then acquire ownership of this new corporation directly.

However, spin-offs also present certain challenges and mandatory statutory rules: transferees can become co-liable for the remaining business prior to the spin-off date, specific formal requirements can make the timeline cumbersome, and the mandatory notarisation of spin-off documentation can result in higher transaction costs compared to uncomplicated asset transfers.

Spin-offs in Germany can be structured as tax-free transactions at both the corporate and shareholder levels, provided certain legal and tax requirements, especially under the German Reorganisation Tax Act (UmwStG), are met.

To qualify, the transaction must involve the transfer of a functionally separate business unit capable of operating independently after the spin-off. All assets and liabilities essential to that business must be clearly allocated to the transferee entity. The reorganisation must not amount to a hidden sale or preparation for a disposal to a third party.

Tax neutrality also requires timely application of rollover relief and adherence to formal requirements, including proper valuation and documentation.

It is legally permissible and commercially well-established in Germany to structure a spin-off immediately followed by a business combination. Both the spin-off and the subsequent merger are governed by the German Reorganisation Act (UmwG), which sets out detailed procedural requirements.

A crucial legal consideration in spin-mergers is the statutory liability regime. Under German law, all entities involved in the spin-off, both the original company and the spun-off unit, remain jointly liable for pre-spin-off obligations. When a merger follows, these liabilities are inherited by the combined entity. This can create legal and financial risk unless adequately addressed. As a result, parties typically negotiate comprehensive cross-indemnity agreements and risk allocation provisions to manage legacy claims and unforeseen exposures.

The typical timing for a spin-off in Germany is variable, ranging from several months to over a year, depending significantly on the transaction’s complexity, the specific regulatory requirements involved, and the intricacies of the companies.

Key phases include an initial planning and preparation stage, involving strategic assessment, due diligence, and documentation, which can take several months.

Seeking an advance tax ruling from the competent tax office is highly advisable, though not mandatory, as it clarifies the tax implications and helps ensure tax neutrality, thereby avoiding unexpected liabilities. The process for obtaining such a ruling can itself take several months, further influenced by the transaction’s complexity and the specific workload of the tax office.

In Germany, it is permissible for a prospective bidder to acquire a stake in a public company prior to making a formal takeover offer. While this approach is often considered, it is not particularly common in practice. More frequently, bidders seek to enhance deal certainty through irrevocable tender commitments from key shareholders or by entering into share purchase agreements that are conditional upon the success of the offer (see 4.12 Irrevocable Commitments).

Any stakebuilding must, however, be conducted in strict compliance with capital markets regulation. Acquirers are subject to insider dealing prohibitions under the EU Market Abuse Regulation (MAR) and may not use any non-public, price-sensitive information obtained during stakebuilding or otherwise when trading securities.

Acquisitions of voting rights in listed companies trigger disclosure obligations under the German Securities Trading Act (WpHG). A shareholder must notify both the issuer and the Federal Financial Supervisory Authority (BaFin) without undue delay (and no later than four trading days) upon reaching or crossing thresholds starting at 3% and 5%, then in 5% increments up to 30%, as well as 50% and 75% of the voting rights. Similarly, acquiring financial instruments (such as total return swaps) can trigger such disclosure obligations as well. Once the 10% threshold is reached, the acquirer must also disclose its intentions regarding the investment (though this is typically a relatively generic disclosure). Reaching the 30% threshold (directly or indirectly) may also trigger a mandatory takeover offer (see 4.2 Mandatory Offer).

Unlike in jurisdictions such as the United Kingdom, German law does not impose a “put up or shut up” requirement. There is no general obligation to make an offer or to declare an intention not to do so within a specified period.

It should be noted though that the price paid for a share in the target company acquired in the six months prior to launching a takeover offer or while it is ongoing will set a floor for the offer price (unless the three-month-volume-weighted average share price prior to announcement is higher, in which case this is the minimum price; see 4.2 Mandatory Offer).

German law provides for a mandatory offer threshold under the Securities Acquisition and Takeover Act (WpÜG). A mandatory takeover offer is triggered when a person, acting alone or in concert with others, acquires control of a target company whose shares are admitted to trading on an organised market (ie, a regulated market) in Germany.

Control is defined as holding 30% or more of the voting rights in the target company (Section 29 WpÜG). This threshold applies regardless of whether the shares are acquired directly or indirectly, and it includes voting rights attributed to the acquirer under legal or contractual arrangements or held by affiliated parties. Once this threshold is crossed, the acquirer is obliged to launch without undue delay a mandatory public offer for all remaining shares in the target company at or above a minimum price. This minimum price is typically determined by the average stock market price of the shares over the last three months prior to the announcement of the control acquisition, or the highest price the acquirer has paid for shares in the target over the past six months, whichever is higher.

In contrast to some other jurisdictions, the German system is rules-based and applies automatically upon the 30% threshold being crossed. There is no need for the authorities to determine whether control has been acquired on a case-by-case basis.

In Germany, the typical structure for acquiring a public company is through a public takeover offer regulated by the WpÜG. In such transactions, the bidder acquires shares directly from existing shareholders through a tender offer (and, potentially, additional on- or off-market purchases), either in the form of a voluntary offer or, if the 30% control threshold has been crossed, as a mandatory offer. This structure, and in particular the voluntary tender offer, is favoured for its procedural flexibility, lower legal hurdles, and alignment with market practice. Depending on the level of acceptance, it may result in a simple controlling stake or even provide a supermajority or more in the target. Given that a 100% acceptance rate is practically never achieved through the offer alone, the question of whether to set a minimum acceptance rate condition for the tender offer, and if so at what level, is a key tactical decision with a view to any subsequent integration measures (see 4.7 Minimum Acceptance Conditions).

Mergers, while legally possible under the UmwG, are considerably less common for the acquisition of public companies. The primary reasons for their infrequent use are their greater complexity and the extensive degree of shareholder involvement required (including shareholder litigation risk). Mergers demand a supermajority shareholder approval from both the acquiring and target companies, often 75% of the capital represented at the shareholder meeting. This higher approval threshold and the intricate procedural requirements provide minority shareholders with a lot of room to challenge the merger. Tender offers provide a more flexible and often faster route to gaining control of a public company. However, mergers are often employed at a later stage (see 4.11 Additional Governance Rights).

In Germany, cash consideration is the most typical and widely used form of payment in public company acquisitions, including in the energy and infrastructure sector. Cash offers provide clarity and transactional certainty. While stock-for-stock transactions are legally permissible and occasionally employed by listed acquirers they are less common due to valuation complexities, dilution concerns, and regulatory challenges.

As a general rule, all-cash consideration is only possible in public takeover offers (tender offers). In merger transactions under the UmwG, shares are the default consideration, though a combination of shares with up to 10% of the consideration in cash may be used. The issuance of shares can only be avoided where all shareholders of the target agree (which is practically impossible in a listed company).

German takeover law mandates strict minimum price requirements to ensure shareholder protection. Under the WpÜG, the offer price must be at least the higher of (i) the volume-weighted average stock exchange price of the target shares during the three months preceding the offer announcement and (ii) the highest price paid by the bidder for shares in the last six months prior to the launch of the offer.

Regarding valuation uncertainty, mechanisms such as contingent value rights (CVRs) or earn-outs – common in private M&A to bridge valuation gaps – are rarely used in public takeover transactions in Germany. The strict pricing rules and the preference for straightforward cash consideration limit the acceptance and practicality of complex contingent payment structures.

Takeover offers in Germany commonly include several conditions, which must strictly adhere to the WpÜG and are subject to close scrutiny by BaFin. The regulatory framework aims to ensure transparency, fairness, and investor protection by restricting the types of conditions bidders may impose.

Typical conditions include a minimum acceptance threshold, which usually is set to ensure that the bidder reaches a specified minimum level of control – commonly a simple majority of 50% plus one share or higher thresholds for squeeze-out eligibility. This ensures the offer achieves the bidder’s intended level of influence over the target company (see 4.7 Minimum Acceptance Conditions).

Regulatory approval conditions are also standard – eg, required merger/FDI clearance. Such conditions are generally accepted, provided they are bona fide and appropriately disclosed. Additionally, many offers include conditions related to the absence of material adverse changes (MACs) affecting the target’s business or financial position and/or the absence of market MACs. However, BaFin carefully reviews these clauses to ensure they are objectively defined and not overly broad. BaFin prohibits conditions that are subjective, dependent solely on the bidder’s discretion, or lack clear, objective criteria. Conditions that could allow the bidder to withdraw the offer easily or undermine the certainty of the transaction are generally rejected or require modification.

In summary, while conditions are a common and necessary feature of takeover offers in Germany, their use is tightly regulated to maintain the integrity of the offer process and protect minority shareholders.

It has become customary in Germany for the bidder and target to enter into a transaction agreement, often referred to as an “investment agreement” (in the case of a financial investor as bidder) or “business combination agreement” (in the case of a strategic bidder) in connection with a public takeover offer or business combination. While the primary offer document is regulated by the WpÜG, these separate transaction agreements outline further details of the deal between the bidder and the target company’s management or major shareholders.

The target company can agree to certain obligations within these agreements provided they do not breach the management board’s fiduciary duties to act in the best interests of the company and all shareholders. Besides the management and supervisory boards’ agreement to recommend the offer, the target company might agree to provide access to information for due diligence, confirm the accuracy of information provided, and commit to certain actions to facilitate the offer (eg, not soliciting competing offers, subject to fiduciary outs). A target will also typically try to obtain certain strategic commitments from the bidder, often to address concerns raised by other stakeholders (eg, employees, unions, local communities or regional or federal governments), such as to not close certain sites or reduce the workforce for a certain period of time, or to commit to future investments or to backstop target financing with change of control provisions.

It is customary for a public company to give limited representations and warranties in such agreements, primarily covering corporate existence, capacity, good standing, and the absence of certain undisclosed liabilities, as public companies are subject to continuous disclosure requirements.

Overall, while detailed transaction agreements are not technically required, their use has become widespread as they provide clarity on the parties’ intentions and help to allocate risks in public company acquisitions.

Minimum acceptance conditions are typical and strategically important for tender offers in Germany, as they allow bidders to ensure they secure a specific level of control or ownership over the target company. The relevant control thresholds in Germany vary depending on the bidder’s strategic objectives for the post-tender offer phase.

A common minimum acceptance condition is 50% plus one share, which secures a simple majority of voting rights and thus effective control over ordinary shareholder resolutions, such as electing the supervisory board (which appoints the members of the management board). A higher threshold, such as 75% of the share capital or voting rights, might be sought to enable key corporate actions requiring a qualified majority (eg, capital increases, mergers, or a so-called domination and profit transfer agreement; see 4.11 Additional Governance Rights). To effect a squeeze-out of remaining minority shareholders, even higher thresholds are required (see 4.8 Squeeze-Out Mechanisms).

Setting the minimum acceptance condition allows the bidder to ensure that, if the acceptance level is reached and the offer is successful, they will possess the necessary power to implement their post-acquisition strategy. Regulators, primarily BaFin, generally accept clearly disclosed minimum acceptance conditions that are objective and aligned with these statutory thresholds.

Conditions set to very low levels (such as 30%) are uncommon as they risk leaving the bidder without sufficient control. However, given hedge fund speculation around acceptance thresholds and the inability of certain passive funds to tender shares before an offer becomes unconditional, bidders sometimes choose to proceed without a formal minimum acceptance condition. Removing this technical requirement can eliminate uncertainty and, in some cases, lead to higher overall acceptance rates.

German law squeeze-out mechanisms are codified in three main statutes, each with specific ownership thresholds and procedural requirements:

• AktG: This general squeeze-out requires a shareholder to hold at least 95% of the share capital of a corporation. The procedure requires a detailed report from the main shareholder justifying the squeeze-out and the compensation, including an expert determination of the fair value of the shares, and a shareholder resolution with a 75% majority of the capital represented at the meeting. Minority shareholders can challenge the fairness of the compensation offered in court.
• UmwG: This mechanism is used in the context of statutory mergers and group restructurings. It allows for the squeeze-out of minority shareholders if the absorbing entity holds at least 90% of the share capital of the target entity being absorbed. Compensation for minority shareholders must be fair and requires the same valuation exercise as for a squeeze-out under the AktG. Here too, shareholders can demand a review of the fairness of the compensation by a court.
• WpÜG: This mechanism allows a bidder to squeeze out remaining minority shareholders against fair compensation if, after a successful voluntary or mandatory takeover offer, the bidder holds at least 95% of the voting rights. No shareholder resolution is required. Instead, the squeeze-out is effected by way of a court ruling. Minority shareholders can file motions during the court proceedings and challenge the legitimacy of the request for the order.

The WpÜG includes stringent “certain funds” requirements to ensure the seriousness and financial backing of a takeover offer. This means that a bidder must have secured financing before making a public takeover offer.

This confirmation must be backed by a bank or similar financial institutions which effectively guarantees the full offer price by way of a funding confirmation letter that must be published together with the offer document. Full financing typically involves having executed financing documents (eg, loan agreements, equity commitment letters) confirming the availability of funds without any further conditions.

This means a takeover offer or business combination cannot by law be conditional on the bidder obtaining financing. By contrast, in business combinations outside the WpÜG regime, financing conditions are generally permissible (though parties will often nevertheless request certainty of funds prior to any commitment or announcement of the transaction).

In Germany, target companies are generally more restricted in granting deal protection measures compared to some other jurisdictions, primarily due to the strict fiduciary duties of the management and supervisory boards to act in the company’s best interest and ensure equal treatment of shareholders.

While measures like break-up fees and matching rights can technically be used, their effectiveness and enforceability are often debated and limited by German corporate law principles. Break-up fees, in particular, are uncommon and frequently regarded as ineffective or even unlawful if they unduly restrict the board’s ability to consider a superior offer. For a break-up fee to be enforceable, it must be modest and proportionate (typically not exceeding 1-3% of the transaction value), while serving the legitimate interest of the company, not primarily that of the bidder.

Force-the-vote provisions in a merger context are not typical. Non-solicitation provisions (no-shop clauses) may be agreed but they usually include a “fiduciary out” which allows the boards to engage with a superior unsolicited offer if deemed required by their fiduciary duties. The target company’s boards must meticulously consider the offer and its terms to ensure they do not breach their obligations to act prudently and in the best interest of the company and all its shareholders.

If a bidder cannot obtain 100% ownership of a target company following a takeover offer, they can still secure significant governance rights to exert influence and control without full ownership. A substantial shareholding, for example, typically entitles the bidder to vote for representation on the supervisory board in Germany’s two-tier board system. This allows the bidder to participate in strategic oversight, to appoint and dismiss management board members, and to approve major corporate transactions.

A common mechanism in Germany to integrate a subsidiary into a group and effectively control its management and profit distribution is the so-called domination and profit-and-loss transfer agreement between the bidder and the target company.

Establishing this agreement requires a 75% shareholder approval at the general meeting of the target company. Under such an agreement, the controlling entity can pass instructions to the target’s management board and the target’s profits are transferred to the controlling entity, which in turn must cover any losses of the target. This provides a high degree of operational and financial control.

In exchange, remaining minority shareholders are offered fair compensation and an annual dividend guarantee. Both consideration and annual compensation must be determined in a similar way as in the case of the squeeze-out (see 4.8 Squeeze-Out Mechanisms), and the fairness of both elements must be assessed by a court upon request of any minority shareholder.

It is common for bidders in Germany to try and obtain irrevocable commitments from principal shareholders of the target company to tender their shares in the offer and support the transaction. These commitments provide the bidder with increased deal certainty, help reach minimum acceptance conditions, and signal strong shareholder support to the market. The nature of these undertakings can vary.

Typically, they involve a contractual commitment to accept the tender offer or vote in favour of a merger. However, these commitments can provide an “out” if a clearly superior unsolicited offer emerges that the target company’s board, acting in its fiduciary duty, recommends to its shareholders; in some situations though, a bidder will have the leverage to avoid such an “out”, in particular if the target has run an auction to determine which bidder to support. In any event, the specifics of such “out” clauses are negotiated, typically allowing the shareholder to withdraw its commitment or accept a better offer (only) under defined circumstances, balancing deal certainty for the bidder with the shareholders’ and target boards’ desire for flexibility in a competitive situation.

Launching a takeover offer in Germany requires publication of an offer document which needs to have been reviewed and approved by the regulator BaFin prior to its publication. BaFin’s Securities Supervision Directorate is responsible for reviewing the offer document for compliance with the WpÜG and associated regulations. BaFin has a period of 10 to 15 working days to review the draft offer document.

BaFin’s review focuses on the completeness and accuracy of the information provided to shareholders and whether the offer complies with the WpÜG’s formal and substantive requirements, including whether the offer price adheres to the minimum price rules set forth in the WpÜG (see 4.4 Consideration and Minimum Price). BaFin also reviews whether the offer period and other timing elements are in line with the strict WpÜG requirements (see 4.14 Timing of the Takeover Offer).

A bidder has four weeks from announcing its intention to launch an offer to submit the offer document to BaFin for a 10–15 day review (see 4.13 Securities Regulator’s or Stock Exchange Process). In certain limited cases, this period can be extended by BaFin to ten weeks.

Following approval, the acceptance period runs for four to ten weeks. This can only be extended in limited cases, such as a competing offer being announced. With the exception of regulatory approvals, which can have a longer back-stop date, all conditions must be met during the tender period for settlement to occur shortly after.

The tender or acceptance period can only be extended in very limited circumstances, such as in case of a (permitted) change of the offer terms during the last two weeks. Such a change is essentially only permitted in the case of an increase of the offer price or the waiver of a condition or to match the tender period of the competing offer. If the tender offer is successful, shareholders who have not accepted the offer in the initial tender period have an additional two-week period after the results are published to decide whether to tender after all (“additional tender period”).

Privately held companies are commonly acquired following either an auction process or bilateral negotiations on the basis of a share or asset purchase agreement. An auction process is typically used by the seller when strong interest from multiple buyers is expected. Bilateral negotiation, conversely, is more common when dealing with a strategic buyer and/or for the formation of a joint venture.

Acquisitions are generally structured as share deals or asset deals, depending on tax, liability, and regulatory considerations. Key considerations in such acquisitions revolve around transaction structure, management retention, and the form of consideration. Cash transactions remain the norm, providing a clean exit and immediate liquidity. Stock-for-stock and hybrid models (such as earn-outs or vendor reinvestment) are less frequent but do occur.

Transaction terms typically involve representations and warranties (called guarantees in the German context, which have become slightly more buyer-friendly recently, covering fundamentals, operational, and compliance matters), liability limits, and sometimes uncapped indemnities for identified risks such as tax, pension, or environmental liabilities. Warranty and Indemnity (W&I) insurance is often used to smooth negotiation over liability caps. Escrows are less common but can address long time limits – eg, regarding tax audits.

While establishing a new company in Germany involves few formalities, operating in the energy and infrastructure sectors is subject to comprehensive regulation from bodies like the Federal Network Agency (BNetzA).

The operation of energy infrastructure, such as networks, storage systems or LNG terminals, is typically subject to licensing or certification. Furthermore, activities related to supply, trading and metering may also require prior notification or a licence. The unbundling regime, particularly for network operators, mandates a separation between generation and supply activities on the one hand and infrastructure (in particular network) operation on the other. This is subject to a particularly strong regulatory regime when transmission network operation is concerned.

Beyond the energy regulatory regime, most installations also require construction or operational approval, with the specific type of permit depending on the technology employed.

Support for renewable energy projects is determined through competitive tenders, such as auctions conducted under the Renewable Energy Act (EEG) or Energy at Sea Act (WindSeeG). These awards impose strict development milestones and penalty regimes to ensure timely project completion.

The overall approval timeline varies widely: smaller projects may obtain permits within six to twelve months, whereas large-scale infrastructure or offshore projects can take many years, reflecting the complexity of environmental assessments and public-participation procedures.

The primary securities market regulator for M&A transactions in Germany is the Federal Financial Supervisory Authority, commonly known as BaFin.

Specifically, the Securities Supervision Directorate within BaFin holds the responsibility for overseeing takeovers of companies whose shares are listed on a regulated market in Germany. BaFin’s role encompasses reviewing offer documents for compliance with the WpÜG, ensuring transparency, investor protection, and adherence to minimum price rules. It also establishes and monitors the timelines for takeover offers and co-ordinates regulatory aspects when competing offers arise.

Foreign investments in Germany are generally permitted, but certain transactions are subject to foreign direct investment (FDI) screening.

The BMWE reviews these acquisitions to ensure that they do not pose a threat to national security or public order. German FDI control distinguishes between two main types of reviews, each with different scopes, triggers, and consequences, as outlined below.

Sector-Specific Review

This review applies to the acquisition of at least 10% of the voting rights in a German company by any non-EU/EFTA investor, provided the target company operates in highly sensitive sectors related to defence and classified IT security technology. It constitutes a mandatory notification obligation to the BMWE. These transactions are subject to a prohibition on closing until the BMWE has issued a clearance decision or the review period has expired without intervention.

Cross-Sectoral Review

The cross-sectoral review applies to acquisitions of at least 10%, 20%, or 25% of the voting rights in a German company by a non-EU/EFTA investor, depending on the target’s sector. A mandatory notification is required at the 10% or 20% thresholds where the target operates in highly sensitive areas (such as critical infrastructure or technologies). In other cases, investors may seek a certificate of non-objection voluntarily. Transactions subject to mandatory notification under the cross-sectoral review have a suspensory effect; they may not be consummated until the BMWE grants approval or the statutory review period lapses without intervention.

Germany conducts national security reviews of acquisitions, specifically foreign investments, to prevent security risks (see also 5.3 Restrictions on Foreign Investments). The core objective of these regulations is to safeguard public order and security, which encompasses essential security interests of Germany.

Germany also has robust export control regulations, managed by the Federal Office for Economic Affairs and Export Control (BAFA) in accordance with EU law. These controls aim to prevent the proliferation of weapons of mass destruction, avoid the destabilising the accumulation of conventional military equipment in crisis regions, regulate dual-use items (goods with both civil and military applications), and prevent contributions to human rights violations.

The basic antitrust filing requirements applicable to takeover offers and business combinations in Germany are governed by the Act Against Restraints of Competition (GWB) and enforced by the Federal Cartel Office (BKartA). The BKartA must prohibit a merger if it would significantly impede effective competition, in particular by creating or strengthening a dominant position.

A filing obligation arises if the undertakings involved meet certain turnover or consideration thresholds. The authority then conducts a review, which can be a one-month Phase I investigation for simple cases or an extended Phase II investigation for complex ones.

Transactions meeting the EU dimension thresholds under the EU Merger Regulation fall under the exclusive jurisdiction of the European Commission instead of the BKartA.

Acquirers of German companies must carefully consider the employee participation and labour-law framework, which can materially affect both the transaction process and post-closing integration.

Employee representatives organised in a works council have extensive information and consultation rights in the event of a business transfer or restructuring. While the works council’s opinion or advice is not binding on management or the board, it must be formally sought and documented before implementation of measures that affect employees.

In share deals, mere changes in ownership do not trigger consultation duties, but subsequent operational changes, such as restructuring or integration, do. In asset deals constituting a transfer of business (TUPE), employees automatically transfer by operation of law to the buyer on existing terms, and both employer and works council must be informed in writing about the timing, reasons, and implications of the transfer.

Germany generally does not impose specific currency control regulations that restrict the free flow of capital for M&A transactions, meaning there is typically no requirement for a central bank approval for such transactions. Cross-border payments must comply with foreign exchange reporting obligations.

However, anti-money laundering (AML) stipulations have an increasing and critical impact on business operations and M&A processes in Germany. Banks and notaries and also lawyers involved in facilitating M&A transactions have a legal duty to ensure AML compliance.

M&A activity in Germany’s energy and infrastructure sector continues to be shaped primarily by regulatory and political developments rather than by individual court judgments. Court decisions tend to have case-specific effects and rarely alter overall valuation models or deal structures.

Tightened Regime for Foreign Direct Investment Control

In recent years, Germany has strengthened its regulatory regime on FDI control. These rules now provide executive power to the Federal Ministry for Economic Affairs and Energy (BMWE) to review and block acquisitions of German companies involved in critical energy and infrastructure sectors. Critical infrastructure explicitly includes energy grids and storage systems, as well as several types of production assets.

Energy Crisis Legislation

In response to the 2022 energy crisis, the Energy Security Act (EnSiG) has been amended. The amendments grant the state detailed powers to intervene in energy companies where necessary to safeguard Germany’s energy supply. These powers include, among other measures, the ability to nationalise critical energy companies. For example, the nationalisations of Uniper (2022) and SEFE (formerly Gazprom Germania) were implemented on the basis of the amended EnSiG.

Smart Meter and Energy Law Package

Amendments to the Energy Industry Act (EnWG) and the Metering Point Operation Act (MsbG) introduced an accelerated rollout of smart metering systems (iMSys), prioritising controllable and system-relevant metering points and adjusting statutory price caps. These reforms strengthen the economics of metering-point operators and grid-adjacent service providers while embedding data and flexibility management more firmly in the regulated framework.

ECJ on the “Customer Installation” Concept Under § 3 No 24a EnWG

In late 2024, the ECJ held that Germany’s broad “customer installation” exemption from distribution-system regulation is incompatible with the EU Internal Electricity Market Directive. The decision calls into question the long-standing national practice that allowed large industrial sites and real estate complexes to operate quasi-private grids without full network-operator obligations.

The German government continues to combine ambitious energy-transition targets with its overarching commitment to achieve greenhouse-gas neutrality by 2045, while balancing affordability, security of supply, and cost efficiency.

Acceleration of Renewables Permitting and Grid Connection

A key legal development has been the transposition of the EU Renewable Energy Directive (RED III, EU 2023/2413) through national implementation legislation adopted in summer 2025. The new rules introduce “infrastructure areas” for renewable-energy and grid projects, impose binding time limits on approval procedures, and establish streamlined one-stop shop processes. Renewable generation and associated grid assets are now treated as matters of overriding public interest.

Expansion Targets

Germany’s expansion pathway remains one of Europe’s most ambitious. Offshore wind capacity is targeted to rise from roughly 9 GW today to 30 GW by 2030. Solar PV additions exceed 15 GW per year under the Solarpaket I (2024) and auction reforms within the Renewable Energy Act (EEG).

Grid Integration and Cost-Sharing Reform

The BMWE aims to align renewable deployment with network capacity. Where grid congestion is acute, developers are expected to bear a larger portion of connection and reinforcement costs; conversely, at system-friendly locations, accelerated connection and lower cost contributions are envisaged. This differentiated approach is intended to reduce curtailment, optimise system efficiency, and integrate decentralised flexibility assets such as storage and demand response.

Hydrogen Strategy and Infrastructure Development

Germany’s National Hydrogen Strategy, updated in 2023, sets out the ambitious target of 10 GW of domestic electrolysis capacity by 2030 and 95–130 TWh of annual hydrogen demand, with long-term goals of 30–40 GW by 2035–2040. A key element of this strategy is the realisation of a national hydrogen core network (H₂-Kernnetz), planned to be operational as of 2032, connecting industrial clusters, storage facilities, and import terminals. To facilitate this development, a dedicated regulatory framework has been implemented that shall ensure the amortisation of investments in the hydrogen core grid and thereby promote private sector participation. The BMWE also supports international import corridors through long-term partnerships in the North Sea, Southern Europe, and the MENA region.

Together, these developments demonstrate Germany’s determination to accelerate renewable deployment, modernise grids, and support industrial decarbonisation while maintaining system stability.

In Germany, the due diligence process for listed energy and infrastructure companies is governed by a combination of securities law, stock exchange regulations and corporate governance principles.

Public companies are allowed to provide financials, business plans, intellectual property, legal documents, and operational data to bidders, but this must be done with careful consideration of its interest in protecting sensitive, potentially price-sensitive information, unless the information is already generally available.

The information disclosure may already constitute inside information, requiring the public company to implement pertinent compliance procedures such as establishing restricted teams, ensuring strict confidentiality, managing self-release of information, and continuous monitoring. As a general rule, the public company may only disclose price-sensitive “inside” information if there is a “need to know”. This assessment primarily rests with the management board of the public company.

The management board of a public company plays a critical role in balancing the interest of confidentiality with the aim of a successful deal. While there is no strict requirement to do so under German law, the management board of a public company will be expected to give the same information to all bidders during a competitive process, thereby preventing any bidder from gaining an advantage based on better access to information as selective information-sharing might conflict with the fiduciary duties of the management board to act in the best interest of the company and its shareholders.

Several legal and regulatory restrictions impact the due diligence process for energy and infrastructure companies in Germany, primarily concerning data privacy.

One key area of restrictions arises from confidentiality obligations under regulatory permits, concession agreements and contracts.

Also, the General Data Protection Regulation (GDPR) is paramount, requiring that any personal data disclosed during due diligence must be handled in full compliance with its principles. Special data protection obligations can arise in exceptional cases, such as in the scope of the Metering Point Operation Act (MsbG), which governs smart meters and energy consumption data, requiring careful consideration for targets in these niches.

The disclosure of a takeover bid in Germany is governed by the WpÜG and EU Market Abuse Regulation (MAR). The WpÜG applies to voluntary offers for public companies that have their registered seat in Germany and whose shares are listed on a European Economic Area or German stock exchange. The bidder needs to make a public announcement under WpÜG if it has decided to launch an offer (which typically coincides with the signing of a business combination agreement with the target and execution of any irrevocable undertakings). The target may also be required to make an ad hoc disclosure if the information about the potential deal has become inside information under MAR, but is permitted to delay such disclosure if this is in the best interest of the company, the public is not misled and confidentiality is maintained. This also means that a target may be forced to announce that it is in talks if a leak occurs.

If a bidder reaches or exceeds 30% ownership in a publicly listed target company or decides to launch a tender offer to acquire shares in a publicly listed target company, the bidder must disclose this immediately, meaning a formal notification to BaFin and the relevant stock markets must occur within seven working days after the 30% threshold is reached and otherwise immediately after the bidder decides to launch a public tender offer. This early disclosure ensures transparency and fair information access for all market participants and is aimed at preventing insider trading and allowing shareholders to make informed decisions.

After this initial announcement, the bidder is obliged to prepare and submit a tender offer (see 4.2 Mandatory Offer).

In Germany, consideration in a public tender offer may only be satisfied with shares instead of cash if these shares are listed on a regulated stock exchange in the EU or EEA (like the Frankfurt Stock Exchange) no later than upon settlement of the offer (ie, issuance of such offer shares to the tendering shareholders of the target company).

Should this situation arise, the offer document must typically incorporate a full prospectus. This prospectus must contain all the information generally required for public offerings that involve the issuance of shares, ensuring prospective investors receive comprehensive and accurate details. This legal requirement stems from the EU Prospectus Regulation and the German Securities Prospectus Act (WpPG).

The prospectus portion of the offer document must include, in particular, detailed disclosure on the issuer, the securities offered, and other relevant information to enable the target’s shareholder to make an informed decision.

In a public bid offer in Germany, bidders are required to produce financial information in their disclosure documents, whether the transaction is structured as a cash or share-for-share deal. This information is crucial for shareholders to assess the financial capacity of the bidder and the implications of the offer.

Specifically, the offer document has to include comprehensive details on the financing of the offer itself, in particular to demonstrate that the bidder has secured the necessary “certain funds” (see 4.9 Requirement to Have Certain Funds/Financing to Launch a Takeover Offer).

Beyond that, the bidder must disclose information regarding its own assets, financial position, and income situation, both before and after the offer, to provide context on the bidder’s financial health. Additionally, information on the bidder’s participation in the target company (if any) and its intentions regarding the future business activities of the target company and its employees must be included. While the specific requirement for financial statements to be prepared in a particular form (eg, GAAP or IFRS) is implicitly linked to the bidder’s existing financial reporting standards, the WpÜG primarily focuses on the content and completeness of financial information relevant to the offer and its funding.

In case of a share-for-share transaction, it is noteworthy that the disclosure requirements are much more extensive given the requirement for a prospectus-like annex to the offer document (see 8.2 Prospectus Requirements). Such prospectus must comply with the requirements of the EU Prospectus Regulation which, inter alia, requires the publication of audited financial statements of the bidder, including potentially pro forma financial information with regard to the planned business combination.

The extent to which transaction documents must be filed or disclosed depends on the type of transaction and the relevant regulatory context.

For public bids, the most critical document, the offer document itself, is published following BaFin approval. This document must include all material terms of the offer, but the underlying transaction agreements themselves are not required to be filed or published in full.

The German commercial register is a publicly available database where various corporate documents are filed. For instance, merger documents (such as merger agreements and shareholder resolutions for mergers) and a GmbH’s articles of association are publicly accessible. Due to this public accessibility, parties commonly opt to detail sensitive commercial terms in confidential, private agreements (eg, shareholders’ agreements, joint venture agreements) and only include the legal minimum requirements in the documents to be filed with the commercial register.

In any German M&A transaction, directors on both the management and supervisory boards are bound by statutory and fiduciary duties stemming from the AktG/GmbHG and, for listed companies, the WpÜG. These duties of care, compliance, and loyalty require directors to act with the diligence of a prudent businessperson by informing themselves thoroughly, obtaining expert advice, and basing decisions on sound reasoning. While their primary duty is to the company’s best interest, which indirectly serves shareholders, there is a growing emphasis on considering other stakeholders like employees and creditors.

The practical application of these duties differs significantly between private and public transactions. In private M&A, directors of the target have limited impact, as shareholders predominantly negotiate and direct the transaction.

Conversely, in public business combinations regulated by the WpÜG and overseen by BaFin, directors of both the bidder and target have a more active role, with heightened duties of transparency, neutrality, and procedural fairness.

The target company’s boards must issue a reasoned statement (Section 27 WpÜG) assessing the offer’s price, the bidder’s strategic intentions, and its implications for employees, operations, and business locations, concluding with a recommendation to accept or reject.

Once an offer is announced, the target’s board is bound by a duty of neutrality (Section 33 WpÜG) and may not take frustrating actions without the supervisory board’s approval for legitimate corporate interests. This rule emphasises shareholder decision-making but allows for justified exceptions, provided all shareholders are treated equally. The board must also consult with works councils to consider employee interests.

Compared with jurisdictions like the United States or the United Kingdom, where special committees are a familiar component of deal governance, under German corporate law the legal framework and governance culture are somewhat different. This is mainly due to the two-tier board structure, with the executive management board being separate from the supervisory board. The formation of special or ad hoc committees in the context of business combinations is possible, but it is not routine and usually reserved for specific situations, especially when conflicts of interest arise.

Under German law, both the management board and supervisory board have distinct and complementary responsibilities. Their conduct in the context of a public takeover is governed primarily by the AktG and the WpÜG.

In a friendly transaction, the management board is expected to take an active role in evaluating and negotiating the offer. It considers whether the proposal aligns with the company’s strategic objectives, whether the price offered is adequate, and what implications the transaction may have for stakeholders. The management board, together with the supervisory board, must issue a reasoned statement under Section 27 of the WpÜG (see 9.1 Principal Directors’ Duties). In the case of a hostile or unsolicited offer, the boards may express their opposition and present counterarguments, but their actions to frustrate the offer are very limited (see 9.1 Principal Directors’ Duties). While this means that German law places the ultimate decision in the hands of shareholders, in practice “hostile” tender offers without support of the boards are rather the exception than the norm.

Shareholder litigation is much less common in Germany than in jurisdictions like the United States. German law does not provide for routine “merger objection” suits or expansive class action mechanisms. However, this does not mean boards and buyers operate free of risk. Shareholders may still challenge transactions in several ways, in particular in the context of squeeze-outs, domination and profit transfer agreements, etc (see 4.8 Squeeze-Out Mechanisms).

In connection with a takeover or business combination in Germany, directors commonly seek various forms of independent outside advice to ensure they make informed decisions and meet their fiduciary duties. This includes:

• legal advice on regulatory compliance (eg, WpÜG), transaction documents, and legal risks;
• financial advice on deal structuring and financing; it is customary for financial advisers to provide a fairness opinion to the target’s board(s) which assesses whether the offer is fair from a financial standpoint; and
• tax advice to ensure tax-efficient structuring and manage risks.