German merger control rules are contained in Section 35 et seq of the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen (GWB) or ARC). Furthermore, the German Federal Cartel Office (Bundeskartellamt or FCO) has issued several guidance papers on its website – eg, in relation to domestic effects, market dominance and the size-of-transaction threshold.

Concerning other relevant legislation for foreign transactions or investment, Germany has one of the most established and active foreign investment control regimes in Europe. See 9. Foreign Direct Investment/Subsidies Review.

With regards to legislation relating to particular sectors, Germany recently introduced and amended a sector-specific exemption to the scope of application of the general merger control rules for certain hospital mergers (Section 187(9) and (10) ARC), see Section 2.3 Types of Transactions.

The German merger control regime is enforced by the FCO, which has its seat in Bonn. The FCO is headed by a president, currently Andreas Mundt.

If a merger has been prohibited by the FCO, the parties may apply to the Federal Ministry for Economic Affairs and Energy under Section 42 of the ARC and ask for a ministerial authorisation of the transaction.

Notification is mandatory.

The ARC does not sanction a failure to notify but does impose sanctions for the implementation of a notifiable transaction prior to clearance (see 2.13 Penalties for the Implementation of a Transaction Before Clearance).

For merger control purposes, the ARC exhaustively defines concentrations as any of the following transactions:

• an acquisition of assets constituting the whole or a substantial part of an undertaking;
• a transaction conferring direct or indirect control of the whole or parts of an undertaking;
• the acquisition of shares in another undertaking if such shares alone, or together with shares already held, amount to or exceed 25% or 50% of the undertaking’s share capital or voting rights; or
• any other combination of undertakings where one or several undertakings can exercise, directly or indirectly, competitively significant influence over another undertaking.

The latter covers acquisitions of minority stakes of less than 25% in another company. Such transactions have to be notified if they confer upon the acquirer the ability to exercise influence on commercial policy and, thus, affect the competitive behaviour of the target company.

As in the EU merger control regime, the acquisition of shares for resale by credit institutions, financial institutions or insurance undertakings is not considered a concentration as long as the acquirer does not exercise the voting rights attached to the shares and resells the shares within one year.

Exemptions

Internal restructurings or reorganisations within the same economic entity are not subject to merger control.

Further, concentrations of public institutions in the framework of municipal reforms (situations where municipalities decide to merge their institutions or where municipalities merge themselves) are explicitly not subject to merger control review. In practice, this rule particularly affects hospitals and savings banks.

Some hospital mergers are exempt from merger control under changes introduced by the Hospital Care Improvement Act (Krankenhausversorgungsverbesserungsgesetz). The exemptions apply to the following.

• Transactions involving hospitals qualifying for government subsidies from the hospital structure fund (Krankenhausstrukturfonds) and following the Federal State authority’s confirmation that the merger otherwise complies with competition law (Section 187(9) ARC). Such transactions will need to be closed by 31 December 2038 in order to benefit from the exemption. However, parties will have to file a short post-completion notice to the FCO and in case they filed a merger notification with the FCO, they have to inform the FCO of whether an application for certain funding has been submitted.
• Cross-location hospital mergers under the Hospital Financing Act (Krankenhausfinanzierungsgesetz) that are confirmed by the responsible Federal State authority, after consulting with the FCO, as necessary to improve hospital care and not conflicting with competition law, provided the merger is completed by 31 December 2030 (Section 187(10) ARC). These transactions can only be notified to the FCO if the parties prove that the responsible Federal State authority denied or did not issue the necessary confirmation.

The exemption described above has recently been applied for the first time in a hospital merger between the university hospitals in Mannheim and Heidelberg. The German Ministry of Social Affairs, Health and Integration of Baden-Württemberg approved the transaction, although the FCO had previously prohibited the case

In contrast, the merger control provisions are applicable (analogously) to voluntary mergers of statutory health insurers. Prior to a prohibition in this sector, the FCO has to consult with the relevant supervisory authorities and, partly, different time limits and further specific rules apply.

The concept of control follows the EU merger control system and is regularly interpreted within this framework by the FCO. Control means the effective possibility of exercising decisive influence on an undertaking on a lasting basis. The actual exercise of control is not required. Control may be conferred through rights, agreements or other means (legal or factual) that individually or jointly enable the acquirer(s) to determine the target company’s strategic business decisions.

In terms of acquisition of minority interests, or other interests less than control, a transaction must be notified if the acquirer, following the transaction, holds 25% (or more) of the capital or the voting rights in another undertaking, or gains a competitively significant influence on another undertaking.

The latter scenario covers acquisitions of minority stakes of less than 25% in another company. Competitively significant influence arises where the acquired interest confers upon the acquirer the ability to influence the commercial policy and, thus, to affect the competitive behaviour of the target company. The FCO determines on a case-by-case basis whether this has occurred. In doing so, it considers the rights resulting from the amount of acquired shares as well as so-called plus factors as identified in FCO case law. These plus factors are, for example, voting and veto rights, and board representation rights of the acquirer; other personal links between the parties; options and pre-emptive rights, and information rights of the acquirer; and separate agreements with the target company.

Plus factors do not necessarily have to be ensured by binding agreements; it is sufficient if they provide the acquirer with a factual and lasting influence.

German merger control law provides for a turnover thresholds test and, since 2017, for a subsidiary transaction value test. In the course of the passage of the Competition Enforcement Act, which constitutes the 11th amendment of the ARC, a new filing obligation following sector inquiry was introduced in November 2023.

Turnover Thresholds Test

Pursuant to Section 35(1) of the ARC, a transaction falls within the scope of German merger control law if in the last financial business year:

• the combined worldwide turnover of all participating undertakings exceeded EUR500 million;
• one participating undertaking achieved a German turnover of more than EUR50 million;
• another participating undertaking achieved a German turnover of more than EUR17.5 million; and
• the merger has an effect on the German market.

Size-of-Transaction Test

There is a size-of-transaction test that alternatively applies if the second domestic turnover threshold of EUR17.5 million is not met. A concentration has to be notified if in the last financial business year:

• the combined worldwide turnover of all participating undertakings exceeded EUR500 million;
• one participating undertaking achieved a German turnover of more than EUR50 million;
• neither the target nor another participating undertaking achieved a German turnover of more than EUR17.5 million;
• the value of the transaction (the financial compensation) exceeds EUR400 million; and
• the target has significant activities in Germany.

An exemption to both threshold tests can apply to the credit and banking sector if companies do not provide end consumer services.

The FCO Guidance on Transaction Value Thresholds for Mandatory Pre-merger Notification (published together with the Austrian Competition Authority in July 2018 and updated in January 2022) contains additional information on the interpretation of the new Section 35(1a) of the ARC. There is an ongoing debate on how the requirement of “significant activities” of the target company shall be interpreted and applied, especially in so-called mature markets. Most recently, the German Federal Court of Justice (Bundesgerichtshof) clarified that the requirement of “significant activities” should refer to a company’s current competitive activities within Germany, allowing only for the exclusion of activities that are merely marginal in the domestic market. The Court further indicated that a different approach to assessing mature markets should be adopted only in exceptional circumstances (see decision of 17 June 2025, KVR 77/22, Meta/Kustomer).

Filing Obligation Following Sector Inquiry

The FCO is entitled to impose a filing obligation by decision on a company to notify all transactions in designated sectors pursuant to Section 32f(2) ARC. The decision will be valid for three years but can be extended repeatedly up to three times for further periods of three years.

Requirements are:

• the acquirer’s domestic turnover exceeds EUR50 million;
• the target has achieved a domestic turnover of more than EUR1 million; and
• there are indications that future concentrations may restrict competition in the inquired sector.

However, the FCO must have conducted a sector inquiry examining and analysing the structures and competitive conditions and determined that one or more economic sectors exhibit deficiencies before imposing a filing obligation. The FCO shall only be able to impose this obligation within 18 months following sector inquiry. Most recently, the FCO conducted such sector inquiries inter alia in the domestic waste collection, EV charging infrastructure and fuels sectors. However, so far, the FCO has not imposed any filing obligation.

Calculations of Jurisdictional Thresholds – General Rules

For the assessment of the turnover thresholds, the group turnover of the participating undertakings in the last financial business year has to be considered. This includes the consolidated revenues of all companies belonging to the same group, controlled by the same ultimate parent company, to which the respective participating undertaking belongs. If a participating undertaking is jointly controlled by several undertakings, the full group turnover of all parent companies has to be taken into account.

If parts of one or more undertakings are acquired, only the turnover relating to those parts is considered when calculating the turnover on the seller’s side. This does not, however, apply if the seller keeps control of 25% or more of the shares.

The internal turnover generated within a group of undertakings as well as sales or turnover taxes are excluded from turnover calculations.

As in the European Merger Control Law, several acts of acquisition between the same undertakings (and with the same acquirer) conducted within a period of two years are calculated together for the purpose of the turnover thresholds, provided that they are subject to separate agreement acts and completion, and they meet the turnover thresholds. The entire transaction history within that period is then relevant for the turnover calculation, from the time of the last transaction.

Turnover can be calculated in accordance with Section 270(1) of the German Commercial Code (Handelsgesetzbuch) or based on internationally recognised accounting standards such as IFRS. Thresholds are related to turnovers and thus are not asset-based.

Special Turnover Calculation Rules

Special turnover calculation rules apply to:

• banks, credit institutions, building societies and insurance companies (premium income – the same rules as in the European Merger Control Law);
• undertakings wholly or partly engaged in the distribution of goods (only three-quarters of the turnover resulting from distribution is taken into consideration); and
• undertakings wholly or partly engaged in the publication, production or distribution of newspapers or periodicals and broadcasting companies (the turnover must be multiplied by four).

For the assessment of turnover thresholds, the group turnover of the participating undertakings in the last financial business year must be considered.

Acquirer and Target

Participating undertakings are usually the acquirer (including its parent companies and its subsidiaries) and the target (either the legal entity and its subsidiaries or the business/assets to be acquired). Thus, on the acquirer’s side, all undertakings controlling the acquirer and all undertakings controlled by the acquirer form a group and have to be considered for the calculation of turnover.

On the target’s side, only turnover achieved by the entities controlled by the target and the target’s turnover are taken into account.

If parts of one or more undertakings are acquired, only the turnover relating to those parts is considered when calculating the turnover on the seller’s side. This does not, however, apply if the seller keeps control of 25% or more of the shares.

Joint Venture Company

In the case of a joint venture company, the turnover of all parent companies that, following the concentration, will either jointly control the joint venture or have a shareholding of at least 25% is relevant with a view to the turnover thresholds.

Seller

The turnover of the seller is generally not taken into account. However, this does not apply if the seller keeps control of 25% or more of the shares in the target. In these cases, the seller is a participating undertaking within the meaning of German merger control. This is, in particular, relevant for the setting up of a joint venture with no previous business activities.

Scope of Turnover Information

Turnover information has to be provided for the last business year. However, with respect to subsequent acquisitions and divestments, the date of the notification is relevant for the basis of consolidation. All acquisitions, divestments or business closures that were implemented up until the date of notification of the intended transaction have to be considered. When calculating the relevant turnover, it has to be determined what the turnover of the group (as it stands at the notification date) would have been in the last completed business year.

Generally, German merger control rules also apply to mergers taking place outside Germany, as long as the relevant turnover thresholds are met and the proposed merger has a domestic effect.

The FCO’s Guidance on domestic effects in merger control (2014) deals with domestic effects of foreign-to-foreign mergers and joint ventures. According to these guidelines, a transaction has domestic effects if it is likely to influence competition on the German market directly (appreciable effect). Different factors are taken into account – eg, the involved parties’ business activities in Germany or parties’ domestic subsidiaries/branches.

However, it is not explicitly required that the target company has a presence or assets in Germany for establishing these effects.

There are no market share thresholds under German merger control law.

The following joint ventures are subject to merger control legislation:

• the acquisition of joint control of another undertaking;
• the acquisition of shares reaching 25% or 50% of the capital or the voting rights in a situation in which at least one other undertaking holds 25% or more of the shares; and
• the acquisition of a competitively significant influence in an undertaking controlled by a third party.

In Germany, joint ventures generally have to be notified if two or more acquirers gain joint control, or if each of them acquires at least 25% of the shares, or if they acquire a competitively significant influence on the target. Contrary to the EU merger control regime, this also includes non-full-function joint ventures.

If a participating undertaking is jointly controlled by several undertakings, the full turnover of all parent companies is considered when the turnover thresholds are calculated. Likewise, in cases where a parent company is a participating undertaking in a transaction, the full turnover of the joint venture has to be considered for the turnover calculation, not only in the amount of the interest held.

If a transaction does not meet the jurisdictional thresholds, the FCO does not have any competence to make further investigations or “call in” a transaction under the merger control rules. However, in view of the ECJ’s Towercast judgment, it cannot be ruled out that certain transactions, albeit falling below the merger control thresholds, could be scrutinised under the rules regarding the abuse of a dominant position. 

The participating undertakings are prohibited from implementing the transaction prior to clearance.

If the participating undertakings infringe this suspension obligation, they are subject to fines of up to 10% of the undertaking’s total group turnover in the preceding business year. Individuals (eg, board members) who violate the suspension obligation are subject to fines of up to EUR1 million.

Fines

In the past, the FCO has issued fines in several cases where a concentration has been implemented prior to clearance and is certainly willing to continue this practice. The highest fines imposed on an undertaking at the time of writing amounted to EUR4.5 million in 2008 and EUR4.1 million in 2009 (which in the latter case, however, was revoked). Fines for undertakings usually range between EUR200,000 and EUR400,000. In most cases, the FCO issues a press release indicating the penalty for gun jumping and the undertakings concerned.

Based on publicly available information, the FCO has already imposed a fine of EUR40,000 on a board member for breaching the suspension obligation (however, this was later revoked by the courts). In practice, individual fines for gun jumping seem to be rare.

Demerger Proceedings

Legal acts (eg, the transfer of shares) that infringe the suspension obligation are void. However, legal invalidity resulting from gun jumping may be remedied. Remedying such actions requires notification of the implementation of the transaction to the FCO. The FCO then opens demerger proceedings, in the course of which it applies the same substantive test as in a standard merger control review. Demerger proceedings are not subject to any deadlines.

Should the FCO be satisfied that the transaction does not meet the requirements for a prohibition (as it is or after removal of the relevant competition concerns through obligations and conditions) or if the Federal Minister for Economic Affairs and Energy grants permission to implement the transaction (as discussed below), the FCO will close the demerger proceedings. This has an effect tantamount to a clearance decision, so the legal acts carried out in relation to the transaction will retroactively become valid. Otherwise, if the FCO does not approve the transaction, it may dissolve it.

Furthermore, under the ARC, the invalidity of specific transactions caused by gun-jumping may be cured by way of registration. This applies to real estate agreements once they have become legally valid by entry into the land register; to certain agreements on the conversion, integration or formation of an undertaking; and to enterprise agreements once they have become legally valid by entry into the appropriate register.

The suspension obligation does not apply to public takeover bids or to the acquisition of shares in a series of transactions via stock exchanges as long as those concentrations have been notified to the FCO and the acquirer does not exercise the voting rights related to the shares, or exercises them only to maintain the full value of its investment on the basis of an exemption granted by the FCO.

The FCO may, upon application, grant derogations from the suspension obligation if the parties can justify such exemptions; however, in practice, derogations are rarely granted. In clear-cut Phase I cases, it is normally faster to obtain a clearance decision than derogation from the suspension obligation.

Apart from exceptions in relation to public takeovers or a specific authorisation by the FCO, parties are prohibited from closing the transaction before clearance, which usually includes carve-out solutions. Only in very exceptional circumstances may such scenarios be conceivable, and only then if separation and completion will, beyond any doubt, have no impact on the German market.

In any case, all carve-out solutions should be carefully prepared, analysed and discussed, together with the FCO, prior to implementation.

There is no formal deadline for filing a notification.

A binding agreement is not a prerequisite for filing. Parties only have to demonstrate a good faith intention to implement the transaction.

The FCO charges an administrative fee on the basis of a general fee regulation act. The FCO has discretion in determining the amount, and various criteria are considered in this regard.

The main factors that are considered are:

• the parties’ German turnover;
• the FCO’s (personnel) expenses (if the transaction required a detailed or simple investigation); and
• the economic relevance of the case, including the parties’ shares in the relevant markets.

The maximum statutory amount is EUR50,000 or, in exceptionally complex cases, EUR100,000. In practice, fees usually vary between EUR5,000 and EUR15,000 (simple Phase I clearances), or between EUR10,000 and EUR25,000 (complex Phase I cases), or exceed EUR20,000 (Phase II investigations).

Usually, the administrative fee is payable within one month following clearance of the transaction.

In theory, the acquirer and the target are obliged to notify in the event of an acquisition. If shares or assets are being acquired, the seller is also subject to a notification obligation.

In practice, however, the FCO is usually satisfied if one of the parties (normally the acquirer) submits a notification (ideally but not necessarily in co-ordination with the other parties that are obliged to notify). The other parties may also “join” the acquirer’s notification by submitting a one-line letter.

It is also possible (but not common) to notify jointly.

The FCO publishes as guidance a filing form on its website; however, this form is not mandatory and is rarely used in practice. Notifications are usually filed in the form of a letter to the FCO. The following information is mandatory for a complete filing, which triggers the deadlines.

• A description of the transaction, including, in the case of an acquisition of shares, the size of the interest acquired and of the total interest held.
• Information on the participating undertakings – ie, worldwide, European and German group turnover information, and a list of subsidiaries, including, for both the participating undertakings and the subsidiaries, information on registered seat and business activities; if the size-of-transaction test applies (Section 35(1)(a) ARC), parties have to submit information on the transaction value and the relevant calculation methods.
• Information on market shares reaching at least 20% within Germany (national or regional markets) and underlying sources; although not explicitly required, it is best practice to submit general market share information for the relevant market affected by the transaction (which can be defined wider than Germany) and to provide names of the parties’ main competitors and their market share estimates.
• Indication of a person authorised to accept services in Germany if the registered seat of a participating undertaking is not located in Germany.

Submitting a Filing

The filing has to be submitted in German. Parties are not obliged to submit further documents – eg, sale and purchase agreements. However, the FCO may ask for underlying agreements; in particular, in joint venture transactions.

It may also ask for other documents, such as market reports or case studies. Any accompanying documents, such as annual reports (which are usually enclosed), may be submitted in English.

If the notification is deemed incomplete, the FCO’s review period to clear or prohibit the transaction does not start to run. The FCO can also issue a fine of up to 1% of the undertaking’s total turnover for incomplete filings. In January 2013, the FCO imposed a personal fine of EUR90,000 on the principal shareholder of a German meat manufacturer for submitting incomplete information in the merger control proceedings regarding a planned acquisition of an abattoir.

The review process may take longer than one month if the FCO declares the filing incomplete (in which case the one-month period only starts from the submission of the missing information).

The FCO can impose fines for (negligently or deliberately) providing incorrect information in merger control filings. Fines can reach up to 1% of the undertaking’s total turnover.

In October 2015, the FCO initiated divestiture proceedings against Andechser and Söbbeke, which had submitted incorrect information in merger control proceedings, and finally also imposed a fine of EUR90,000 on the parent company Bongrain Europe SAS (now Savencia SA) in 2016.

The German merger control regime provides for a two-stage review process, with an annual average of more than 95% of cases receiving clearance after the first stage (Phase I). Very few cases are analysed in in-depth proceedings during the second stage (Hauptprüfverfahren – Phase II), discussed further below.

Phase I

A Phase I review formally takes one calendar month following the filing of a complete notification. In practice, clearance may be granted earlier (eg, two/three weeks following submission of the notification), but this essentially depends on the case handler (workload, availability, etc).

In Phase I, the FCO will focus particularly on testing the market definition and market share information submitted by the parties using existing information on the relevant industry sector or by contacting market players and other stakeholders, such as trade associations.

Should the FCO not be satisfied, during the Phase I period, that the proposed transaction does not significantly impede effective competition, it may enter into in-depth investigations. The parties are informed accordingly, usually by a formal letter.

Phase II

A review resulting in a Phase II investigation may take up to five months following the filing of a complete notification (up to six months if the parties submit a first proposal for conditions and obligations). The review process may also be extended subject to the parties’ consent and it is not uncommon for the FCO to express that it would strongly prefer an extension.

There is no formal pre-notification process and informal pre-filing contact with the FCO is still not that typical. They are, however, commonly seen in very complex cases or cases where confidentiality is a crucial issue.

For informal pre-filing contact, the FCO usually wants to receive at least the minimum information concerning the parties, the transaction and the market before entering into pre-notification discussions.

It is not uncommon that the FCO asks for additional information after receiving the filing documents. Detailed questionnaires can be burdensome, and providing answers may be subject to tight deadlines.

The timetable would only “(re)start” if the parties had filed an incomplete notification and subsequently submit the additional information. Further, the five-month examination period is put on hold if the undertakings concerned do not provide the information requested by the FCO completely or in due time.

There is no formal fast-track review process.

The FCO prohibits concentrations that would lead to a significant impediment to effective competition (the “SIEC test”). As with European merger control law, the main example of the SIEC test is the creation or strengthening of a dominant position. The test allows, among others, the prohibition of anti-competitive concentrations in oligopolistic markets, even if undertakings are not or will not become dominant.

FCO Analysis

The FCO determines post-merger effects on the basis of a forecast detailing how the relevant market will develop within an average period of three to five years. This period may be shorter or, in exceptional cases, longer, depending on the specific characteristic of the market structure. Such post-merger effects have to be likely to occur.

In cases where the post-merger effects result in a significant impediment to effective competition, the FCO has to demonstrate that they are caused by the transaction. By contrast, the parties have to show that the transaction has pro-competitive effects that outweigh the relevant anti-competitive effects.

Market Dominance

Market dominance continues to play an important part in the analysis of a transaction. The ARC provides for presumptions of market dominance. A company is presumed to be dominant if it has a market share of at least 40%.

A group of undertakings is presumed to be dominant if it consists of three undertakings or fewer that account for a combined market share of 50%, or if it consists of five undertakings or fewer that account for a combined market share of 66%.

Presumptions can also be rebutted. To do so, the parties have to show either that competition conditions allow for the assumption of continuous substantial competition between the respective undertakings or that the (group of) undertaking(s) has no paramount market position over the remaining competitors.

Presumptions do not keep the FCO from assuming a dominant market position in cases where market shares are lower than those discussed. In March 2012, the FCO published on its website extensive guidance on substantive merger control and the test of market dominance that details its approach and shows a sharper focus on economic findings and concepts in the decision-making process in line with the criteria of the SIEC test.

Special Rules

Special rules apply to concentrations in so-called de minimis markets. These are markets where goods or commercial services have been offered for at least five years and where sales of less than EUR20 million were generated in Germany in the last calendar year, unless the market is characterised by the offer of products or services free of charge. This assessment is carried out on a combined-market basis. While these concentrations have to be notified, the FCO cannot prohibit the transaction on the basis of a significant impediment to effective competition in such markets. The de minimis rule does not apply to notifications filed on the basis of the size-of-transaction threshold.

The FCO is an independent body performing its own assessment of the case. However, in practice, it also includes the decisional practice of the Commission and courts in its assessment.

The FCO broadly distinguishes between horizontal mergers, vertical mergers and conglomerate mergers. Generally, it will investigate in each case the creation or strengthening of single or collective dominance (or, on the demand side, of buyer power in cases of horizontal mergers) and consider both co-ordinated and non-coordinated effects.

Horizontal Mergers

In the case of horizontal mergers, in order to establish single dominance, the FCO investigates which factors determine the parties’ market positions in the relevant market and whether, and if so how, these positions change as a result of the transaction. In addition to market share and concentration levels in the relevant market, various market and company-related factors may be relevant for the assessment: capacities and capacity constraints, customer preferences and switching costs, IP rights and know-how, market phase, access to suppliers and customers, corporate and personal links with other companies, financial resources, barriers to entry and countervailing buyer power.

In cases of collective dominance, the FCO analyses whether the transaction enables the parties to co-ordinate their behaviour in the market or if the transaction facilitates existing co-ordination or makes it more stable.

Vertical Mergers

In the opinion of the FCO, vertical mergers are considered to have more indirect competitive effects. Still, the FCO is also increasingly assessing these mergers in detail.

The FCO assesses in detail any foreclosure effects (input and customer foreclosure) on upstream and/or downstream markets taking into account pre-existing links between the merging companies, alternative supply sources for competitors and the degree of vertical integration of other market players, etc. However, such effects may create competition concerns only if the parties additionally have the ability and the incentive to foreclose.

A further concern may be that the vertically integrated company might gain access to the competitively sensitive information of its competitors.

In the case of collective dominance, the FCO assesses whether the vertical merger enhances co-ordination between the dominant companies.

Conglomerate Mergers

Conglomerate mergers are generally less likely to raise competition concerns than horizontal mergers because they do not entail the loss of direct competition between the merging firms. However, competition concerns may arise if the parties are active in economically related markets; ie, their products are complementary or close to substitution. Typically, this requires that at least one of the parties already has a sufficiently strong market position in one of the relevant markets.

As with vertical mergers, in the case of collective dominance, the FCO will assess whether the conglomerate merger facilitates co-ordination between the dominant companies.

The FCO will consider the countervailing benefits of a transaction. A concentration that would significantly impede effective competition may not be prohibited if the parties prove that the concentration will also have pro-competitive effects that outweigh the significant impediment to effective competition.

The FCO does not consider factors other than competition issues in its decisions.

The situation is different with regard to the procedure for obtaining a ministerial authorisation (Ministererlaubnis) from the Federal Minister for Economic Affairs and Energy. The Minister can overrule the FCO on the basis of social or political considerations (if the concentration’s benefits for the economy as a whole outweigh the disadvantages for competition); however, this is rare in practice. Public interest factors that have been accepted in the past are – eg, safeguarding the technical know-how of companies that are in financial or industrial difficulties, the potential for reductions of subsidies, the long-term security of energy supply, research in the health sector, the protection of employees through collective agreements and operational co-determination and, most recently, know-how and potential for innovation for energy turnaround and sustainability.

For foreign direct investment and foreign subsidies rules see 9. Foreign Direct Investment/Subsidies Review.

In principle, joint ventures may be subject to a twofold assessment, under both the merger control provisions and the antitrust rules. Under the merger control regime, the SIEC test also applies to joint ventures.

The antitrust rules will additionally come into play in the case of co-operative effects, which particularly applies if the parent companies remain active in the joint venture’s fields of activity, or if they are competing in upstream or downstream markets. Only the extent to which the concentration, as such, creates anti-competitive concerns has to be assessed exclusively within the merger control process, which takes priority over the antitrust rules.

Contrary to the EU merger control regime, merger clearance does not automatically entail an exemption for ancillary restraints. Moreover, the deadlines that are applicable with regard to the merger control procedure do not apply to proceedings relating to Section 1 of the ARC/Article 101 of the Treaty on the Functioning of the European Union (TFEU). Therefore, the FCO usually gives priority to the merger control review of the joint venture. In addition, it aims to analyse the joint venture under the antitrust rules and to form at least an opinion on potential infringements and possible exemptions in the course of the merger control proceedings. However, it is also not unusual for the FCO to postpone this assessment until a later stage, usually after the merger control process.

Should the FCO conclude that co-operation in the joint venture violates Section 1 or the ARC/Article 101 of the TFEU and that the conditions for an exemption are not fulfilled, the FCO may issue a prohibition decision, pursuant to Section 32 of the ARC. This is possible even after merger control clearance. Divergent decisions with regard to merger control and antitrust proceedings have, in fact, already occurred in practice.

Following the introduction of the SIEC test, there have been discussions about whether such a twofold assessment is still possible. Clearance of a joint venture would imply that it does not significantly impede effective competition. Accordingly, it would be difficult to argue later, under Section 1 of the ARC/Article 101 TFEU, that the joint venture impedes competition and therefore should be dissolved.

The FCO does have the power to prohibit or interfere with a transaction. It may do so in the course of the regular merger control process or in the course of demerger proceedings after the completion of the transaction.

The FCO is legally obliged to consider whether an authorisation with remedies would alleviate the competition concerns. However, this does not create an obligation to accept any offer of remedies. The FCO only has to accept remedies that will remove the significant impediment to effective competition.

In turn, the FCO must not impose remedies that the parties have not offered. It may propose remedies that it considers suitable, but it is not obliged to do so – it is ultimately up to the parties to develop and offer remedies.

Typical Remedies

Standard remedies are the divestiture of part(s) of the undertakings’ business or the granting of licences to third parties. However, the removal of structural or contractual links with competitors may be appropriate in certain situations – eg, in oligopolistic markets. In the past, the FCO has, among others, allowed the decommissioning of production plants as a suitable (behavioural) remedy, but has not accepted remedy proposals aiming at organisational obligations or investment controls.

Further, it has already imposed a prohibition to co-operate in the area of purchasing on parents that were parties to a joint venture transaction as part of a remedy package. Behavioural remedies, such as granting licences for important technologies or granting customers special termination rights for long-term contracts of the parties, may also be appropriate. The mere closure of capacities or the use of “Chinese walls” within merged entities, however, is not generally considered an effective behavioural remedy.

There is no binding legal standard for remedies. However, the FCO published a Guidance on Remedies in Merger Control in May 2017 that describes the most important types of remedies and explains the requirements that they must fulfil.

Commitments in general can be submitted at any stage of the procedure, during or even before the first phase of merger control. In order to achieve a successful solution, it is highly recommended to co-operate with the FCO fully and at an early stage.

Remedy negotiations usually start as a result of competition concerns that are expressed by the FCO, informally or formally. Procedurally, before prohibiting a transaction, the FCO informs the notifying parties of its competitive concerns and related objections to the transaction. It does this by sending a so-called statement of objections, usually in the form of a draft prohibition decision. The statement of objections may be issued at any time during Phase II.

If remedy discussions start early and are successful, the statement of objections may never be formally issued. However, typically the FCO will send it out towards the end of Phase II. The parties can respond to the statement of objections. In order to prepare this response, they can have access to the FCO file.

Since the FCO is under a legal obligation to consider whether an authorisation with remedies (conditions and obligations) would alleviate the competition concerns, the statement of objections will also deal with possible remedies – even if the parties have not submitted a related proposal. However, as discussed above, the FCO cannot impose specific remedies on its own. It can only issue a clearance decision subject to conditions and obligations that have been offered by the parties.

If the parties agree with the FCO on suitable remedies, the FCO will lay down the conditions and obligations in its final clearance decision, which will also be published in a non-confidential version.

In the case of a divestiture remedy, the parties must generally provide evidence that the divestiture has been completed. It can, however, be sufficient for companies to take all necessary steps to initiate the transfer of ownership at a time when only the entry into the commercial register remains to be submitted, provided that an application for the entry has been lodged with the register.

In appropriate cases, it may be sufficient for the fulfilment of the remedy to provide evidence that all contracts necessary for the divestment have been concluded in a legally binding way. In cases where this appears to be a suitable approach, this will normally be explicitly mentioned in the text of the remedy decision. Any merger control proceedings that may be required with regard to the acquisition of the divestment business by the buyer have to be concluded within the time limit for the implementation of the divestment.

In so far as the remedies include other commitments in the form of a condition precedent, the parties have to prove that they have been implemented as well before they are allowed to complete the transaction.

If the divestiture commitment is a condition precedent (which is the common form) for the clearance decision, a period of six months should be sufficient to meet the requirements. The divestiture period should be as short as possible. However, this will vary from case to case and will usually be set in the text of the remedy decision. An extension of the time limits provided by the remedies is only possible in exceptional cases.

Phase I

In Phase I cases, the FCO informs the parties by informal letter that the transaction does not fulfil the criteria for prohibition and therefore can be implemented. It does not issue a formal decision.

If the FCO does not inform the parties, within the one-month period of Phase I, that it has authorised the transaction or entered into Phase II proceedings, the transaction is deemed to have been cleared.

Phase II

In Phase II proceedings, the FCO issues a formal decision prohibiting or authorising the transaction (unconditional or subject to conditions and obligations). If the FCO does not issue a decision within the relevant deadline, the transaction is deemed to have been cleared.

The FCO publishes on its website that a concentration has been cleared or prohibited. Clearance/prohibition decisions may only be published in Phase II proceedings. The parties will be asked to review the decision and to mark any business secrets. The FCO usually accepts that turnover and market information is confidential. Market share information, however, may be replaced by ranges.

Since 2009, the FCO has also published short summaries (Fallberichte) of important Phase I and Phase II cases on its website.

There is no recent case law on the imposition of remedies or prohibitions of concentrations in foreign-to-foreign transactions. However, in 2024, the FCO raised competition concerns in a Phase II case involving two US-based companies active in the crash test dummy industry, resulting in a withdrawal of the merger notification.

A clearance decision does not automatically entail an exemption for ancillary restraints. There is also no separate notification procedure for ancillary restraints. The parties themselves have to assess any competition concerns in horizontal or vertical agreements.

As is the case with joint ventures, the FCO may analyse ancillary restraints at a later stage, independent of the merger control process. In practice, separate assessments during the merger control process appear to be more common.

Generally, the FCO applies more or less the same principles that apply under EU competition law, namely that ancillary restraints should be permitted if they are necessary and indispensable to the successful implementation of the transaction.

Third parties may apply to be admitted as interveners in the merger control proceedings at any stage of the process. They have to demonstrate that their economic interests will be substantially affected (directly or indirectly) by the decision. However, an application does not automatically result in an admission. The FCO has considerable discretion in this regard.

Although there are no legal provisions related to this issue, competitors, suppliers and customers will usually be deemed to have an economic interest. Associations and trade unions will have to prove that their own interests, or at least the interests of their members, will be affected by the decision.

Third parties that have been admitted as interveners have the right to be heard and to access the file. In practice, this applies mainly to Phase II investigations. However, prior to granting access to the file, any business secrets will be removed.

The FCO usually contacts third parties and competitors during its review process to “market test” the transaction as well as the remedies. In most of the cases the FCO sends out questionnaires.

The fact that a notification has been submitted is published on the FCO’s website. In general, this happens a few days after the filing. Only in very rare cases has the FCO been willing to postpone the publication and only then under very special circumstances.

Besides file number and responsible decision division, the FCO publishes the names of the parties, the date of the filing and the relevant industry sector. The fact of an initiation of Phase II proceedings is published as well. At the end of the proceedings, the FCO will also publish the result of its analysis – ie, clearance (unconditional or subject to conditions and obligations) or prohibition.

Generally, the FCO is obliged to ensure that confidential commercial information, including business secrets, that is obtained during the merger control process remains so. Interveners may have limited access to the file, but not to the business secrets of the parties. Phase II decisions are published in a non-confidential version that has been agreed with the parties.

The FCO is, among others, part of the International Competition Network (currently the ICN Steering Group is chaired by Andrea Marván Saltiel, Chair Commissioner of the Competition Authority Mexico, following FCO President Andreas Mundt’s term from 2013 to May 2025), the European Competition Network (ECN) and the network of the European Competition Authorities (ECA). The ECA is a forum for discussion of all competition law-related matters between the NCAs within the EEA as well as the Commission and the European Free Trade Association (EFTA) supervisory authority. This discussion includes the exchange of information on all merger cases that are notifiable in more than one ECA country (multiple filings).

Phase II Appeals

The parties may file an appeal against Phase II decisions of the FCO to the Higher Regional Court of Düsseldorf within one month following the service of the decision. The appeal can be made on both legal and factual grounds, including new facts and evidence. The period of the appeal proceedings may vary significantly depending on the case, but an average duration of one to three years should be expected.

The decision of the Higher Regional Court may be appealed to the Federal Court of Justice within one month following the service of that decision. This appeal can only be made on legal grounds, and the Higher Regional Court has to have permitted such appeal. The decision not to permit a legal appeal may be appealed to the Federal Court of Justice as well.

The proceedings of the Federal Court of Justice may vary in terms of duration, but again it might take one to three years before a final decision is reached.

In the event of mergers between statutory health insurers, the same rules for an appeal apply, with the exception that the Social Courts have competence.

Applications to the Federal Minister for Economic Affairs and Energy

In the event that the FCO prohibits a concentration or orders the unwinding of a non-notified concentration, the parties may also apply to the Federal Minister for Economic Affairs and Energy to request permission to implement the transaction. The deadline for such application is one month following the service of the decision of the FCO. The regular review period for the Federal Minister amounts to four months.

If the Federal Minister goes beyond the regular four-month period for authorising a concentration that had been prohibited by the Federal Cartel Office, they have to decide on the submission within six months. Additionally, another prolongation of the six-month period for a further two months is possible.

While under previous rules, third parties were admitted to appeal proceedings if their interests were substantially affected by the decision, they now have to claim the violation of individual rights.

The ministerial decision may also be fully appealed to the Higher Regional Court of Düsseldorf.

The proceedings for an application for ministerial permission do not preclude the appeal against the original decision of the FCO, the deadline for which starts to run only after service of the ministerial decision.

Regarding the typical timeline for an appeal, see the explanations in 8.1 Access to Appeal and Judicial Review. Although it is not uncommon to challenge an FCO prohibition decision, in practice, successful appeals are rather rare. One example is the Phonak (now Sonova)/GN Resound transaction that was prohibited by the FCO in April 2007. The Düsseldorf Higher Regional Court confirmed the FCO prohibition in November 2008, but it was finally overruled by the Federal Court of Justice in April 2010.

As an example of an unsuccessful case, in the EDEKA/Tengelmann case, EDEKA and Tengelmann appealed in parallel the FCO’s decision (which only comprises judicial aspects) and applied for a Ministererlaubnis. The Düsseldorf Higher Regional Court rejected the appeal and confirmed the FCO’s prohibition of the merger (which did not have a practical effect because of the Ministererlaubnis).

The right of appeal is also granted to third parties if the FCO decision directly and individually affects their competition interests. A further prerequisite is that such third parties must have been party to the FCO proceedings. This requires that they at least applied to the FCO to be admitted as interveners and complied with all procedural requirements in this regard.

Germany has a separate foreign direct investment control regime consisting of a mandatory sector investment review, a mandatory cross-sector notification review and a voluntary investment review. Filings to the Federal Ministry for Economic Affairs and Energy have to be made in separate proceedings. Since 2017, the German legislature has substantially strengthened and extended the rules in Germany and there has been a significant increase in the number of filings. More than ever, it is imperative for dealmakers to consider foreign investment issues upfront in order to mitigate potential risks and/or delays.

The regime essentially has two prongs:

• a screening process for non-EU/EFTA investors, which applies a 25% filing threshold for all sectors and a reduced 10% filing threshold for transactions in sensitive industries (such as critical infrastructures, cloud computing services or media companies), and a reduced 20% filing threshold for specific high-tech and future technologies as well as certain healthcare target companies; and
• a screening process for non-German investors, which applies a 10% filing threshold for transactions in the wider military sector.

In addition, asset deals are also in scope of the foreign investment regime. If a transaction raises concerns, the transaction may be subject to remedies or, in severe cases, even prohibited.

Transactions triggering a mandatory filing requirement are subject to a comprehensive prohibition on gun-jumping, which carries severe criminal penalties for non-compliance. Since the regime has generally become significantly stricter in recent years and the co-ordination of regulators on an EU level has increased, companies engaged in M&A activities should consider the potential applicability of any foreign regime early on and allow for a lengthier approval process.

The foreign investment regime has been subject to numerous changes in the past years. The 21st and most recent amendment to the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung) entered into force on 23 July 2024, containing – alongside some smaller changes – an expansion of the national dual-use items list (German export list Ausfuhrliste Part I, Section B). Previous changes related to the implementation of the sanctions package adopted by the EU in response to Russia’s invasion of Ukraine, which led to a further change in fine provisions for the financial sector. The 20th amendment continued these developments, but mainly sought to digitise and simplify the administrative procedure by introducing a portal which allows submission of all relevant documents online. The commencement of Phase 1 proceedings under Section 14a of the Foreign Trade and Payments Act (Außenwirtschaftsgesetz) is marked by the successful import of the filing to the IT system of the Federal Ministry for Economic Affairs and Energy (Bundesministerium für Wirtschaft und Energie).

Furthermore, key points for a potentially major legislative project, a new Investment Screening Act (Investitionsprüfungsgesetz), were discussed within the former federal government. It was supposed to extract the regulations applicable to investment screening from the Foreign Trade and Payments Act and the Foreign Trade and Payments Ordinance, restructuring them into a separate law. The legislative process came to a stop with the abrupt ending of the last federal government. According to the coalition agreement of the new federal government, it intends to present a revised Foreign Trade and Payments Act soon, aiming to accelerate, simplify and make the review procedures more practical to apply. However, it remains unclear what the revision will look like and whether it will be introduced in the shape of the envisioned Investment Screening Act. 

There are no national rules regarding foreign subsidies, due to the Foreign Subsidies Regulation on the EU level.