Corporate Law & M&A Transactions

Whenever a decision touches the structure, the shares or the liability of the company. Common triggers are formation, admitting new shareholders, equity investments, buying or selling a company, restructurings and disputes between shareholders. The earlier advice comes in, the easier it is to avoid later corrections and conflict.

A company acquisition usually follows a set path, from initial structuring through legal due diligence and contract negotiation to signing and closing. What matters is the choice between a share deal and an asset deal, the review of legal risks and a purchase agreement that allocates risk clearly between buyer and seller. Where notarisation is required, such as the transfer of GmbH shares, the notary appointment is added.

In a share deal, the shares in the company are transferred, so the buyer takes on the company as a whole, including all assets, contracts and liabilities. In an asset deal, the buyer instead acquires individual assets, such as machinery, customer contracts or trademarks, without taking over the company itself. Which option is preferable depends on the specific situation. Tax aspects, the transferability of existing contracts and permits, and the allocation of risk between buyer and seller all play a central role. In practice, the share deal is especially common when transferring GmbH shares, because it preserves the continuity of the company and the transition tends to be smoother for business partners and employees.

Depending on size and complexity, the range runs from a few weeks to several months. The timeline is driven mainly by the scope of due diligence, the length of negotiations, any required regulatory clearances and, in cross-border deals, coordination across several jurisdictions. A clear structure and a well-prepared data room shorten the process noticeably.

In cross-border transactions, different legal systems, contract standards and completion formalities come together. What matters is the choice of governing law and jurisdiction, translating local legal concepts into the contract, possible merger and foreign investment control proceedings, and the coordination of local counsel. Central steering keeps the transaction consistent across every country. You will find more on this in our article on cross-border M&A from Germany.

The purchase agreement allocates risk between buyer and seller, above all through warranties (for example on the shares, financial statements, key contracts, taxes and litigation), indemnities for known risks and liability limits such as caps, thresholds and time bars. Increasingly, W&I insurance is used, which covers warranty claims and allows the seller a largely liability-free exit. What is appropriate depends on the size, risk profile and the findings of the due diligence.

Where a foreign investor acquires an interest in a German company, the Federal Ministry for Economic Affairs may review the acquisition under the Foreign Trade and Payments Ordinance (AWV). In security-relevant areas such as critical infrastructure, health or defence, notification duties may apply from low shareholding thresholds. This has to be planned early: notifiable acquisitions may only be completed after clearance.

Two mechanisms are available for the purchase price. Under a locked box, the price is fixed on the basis of a historical reference balance sheet; economically the company passes to the buyer from that date, and value leakage until closing is protected by a leakage clause. Under completion accounts, the price is adjusted after closing on the basis of a balance sheet as at completion, usually via net debt and working capital. The locked box has become the norm in Europe because it offers price certainty and a lean completion; completion accounts suit cases where value may still change materially before closing. We select and negotiate the mechanism to fit the transaction.

A concentration must be notified to the Federal Cartel Office where the parties exceed certain turnover thresholds: more than 500 million euros combined worldwide, plus one party above 50 million euros and another above 17.5 million euros of turnover in Germany. Completion before clearance is prohibited. An EU merger control before the European Commission may apply in addition, as may, since 2023, the Foreign Subsidies Regulation (FSR), which requires a separate notification where the target has EU turnover of at least 500 million euros and the parties have received third-country contributions of more than 50 million euros. We assess the notification duties early and build them into the timetable.

A shareholders' agreement governs the relationship between shareholders beyond the articles of association. Typical content includes the composition and powers of the governing bodies, consent requirements, rules on share transfers such as pre-emption, tag-along and drag-along rights, vesting for founders and managers, non-compete covenants and exit and dispute resolution mechanisms. It creates clarity before interests diverge and is central to investments, joint ventures and management participation. We put it in place and negotiate it, aligned with the articles.