Germany surprised the European legal community by announcing on 27 April that it would no longer support and be part of the common position on takeover rules that was adopted by the EU member states on 19 June, 2000.
This was unexpected, especially as Germany had passed a revised draft for the German Takeover Act on 12 March which, so Germany had claimed, incorporated many of the features of the common position. Under Germany’s presidency of the EU Council, significant progress had also been made towards the resolution of the planned 13th EU directive on takeovers.
So what has happened?
Germany has been reported to be concerned about the prospect of an increased likelihood of takeovers of German domestic companies by non-German bidders. Controversy has centred on the scope of the defence measures available to the management of a takeover target. In a more protective interpretation of the common position, Germany argued that the general obligation of the target to be neutral towards the bid and the bidder should be tempered by the availability of certain defensive measures.
This view was apparently not shared by all the EU-member states. Much has been published about the proposed German Takeover Act and on the common position in general. This article focuses on defence measures that will be available to a German target if the draft German Takeover Act comes into effect.
