Germany's national railway operator, Deutsche Bahn, concluded a whirlwind month of negotiations at the beginning of July to acquire 65% of Stinnes, the logistics and freight company, from E.ON, the energy group, for €2.5 billion ($2.5 billion). The transaction is one of the largest acquisitions to close since the German Takeover Act was introduced in January this year and its legal structure points a way forward for future acquisitions under the new laws.
|
Thomas Bücker, Freshfields Bruckhaus Deringer |
"We found a structure with E.ON that circumvents a mandatory offer in Germany. It's a structure that is fairly common in the UK and will become increasingly common in Germany," said Thomas Bücker, who led the Freshfields Bruckhaus Deringer team advising Deutsche Bahn.
If a company acquires more than 30% of a listed company in Germany by way of a conventional sale and purchase agreement it acquires control over the company and will be forced by the takeover law to make a mandatory offer to all shareholders.
"A mandatory offer is not a favourable situation compared to a voluntary offer, where you have more flexibility," said Bücker. For example, a mandatory offer cannot be placed under certain legal conditions. "You have to make the offer to everyone and you can't really control the price," he said.
As a state-owned company the transaction required government approval, which was gained fairly easily. This has prompted some claims that this deal was created in return for the government's approval of the E.ON/Ruhrgas merger, a transaction that has now been hit by a temporary injunction imposed by the Dusseldorf High Court.
E.ON, which was advised by Shearman & Sterling on both deals, also completed an €8.1 billion acquisition of UK energy company Powergen at the beginning of July.
Hengeler Mueller advised Stinnes on the Deutsche Bahn deal.