New legislation in Germany can prohibit investors outside Europe from buying more than a 25% stake in a German business. Philip Martinius and Jan Querfurth report on the effects this amendment could have on M&A
On April 24, 2009, almost unnoticed by the public, an important amendment to the German Foreign Trade and Payments Act (Aussenwirtschaftsgesetz – AWG) entered into force. The amendment materially impacts a significant number of transactions involving German businesses and allows the German Federal Ministry of Economics and Technology (MET) to prohibit investors outside Europe from buying German enterprises or voting stakes of 25% or more in German companies if such acquisitions constitute a threat to the security or public policy of the Federal Republic of Germany.
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