Germany's New Merger Control Regime - New Filing Requirements to Come -

..Introduction of an Upgraded Transaction Value Test

..New Local Nexus Test Requires Further Advance Analysis

Germany is about to enact a revised merger control regime which will result in extended filing requirements in Germany for M&A deals. The new law will likely come into force in Q2 of 2017. It is part of a major amendment to the German Act Against Restraints of Competition (ARC) (Gesetz gegen Wettbewerbsbeschränkungen). To a certain degree such reform is driven by requirements to harmonise German law with EU standards in the area of cartel damage claims and cartel enforcement. Also, it will adjust the German competition law framework to address some of the challenges that come with big data innovation, two-sided markets, and the digital economy more generally. From an M&A perspective, however, the most relevant element of the reform is the change to the thresholds that a transaction engenders in order to trigger merger clearance requirements as overseen by the German Federal Cartel Office (FCO) (Bundeskartellamt).

Today, German merger control follows a purely revenue-based approach to determine whether a proposed transaction is reportable for mandatory FCO clearance. Both parties must have combined worldwide revenues of more than EUR 500 million; one party to the transaction (e.g., the buyer) must have German revenues of more than EUR 25 million; and another party (e.g., the target) must have German revenues of more than EUR 5 million.