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Trends and climate What is the current state of the M&A market in your jurisdiction? With a total transaction volume of $4.3 trillion, 2015 has been a record year for global M&A activities, driven by a number of megadeals, such as the $160 billion Pfizer-Allergan deal.
In contrast, Germany saw only a few major (publicly announced) transactions in 2015, including Vonovia's €14 billion hostile bid for Deutsche Wohnen and Honeywell International's acquisition of the Elster Group. Nevertheless, compared to 2014, the volume of M&A transactions in Germany increased by over 25% to $78.8 billion (€70.7 billion), according to Mergermarket data. This development was largely driven by a sharp rise in domestic activity (+186.9%). By contrast, inbound M&A dropped 13.6% by value to €39.2 billion and outbound activity decreased 72.8% by value to €22.9 billion.
Germany's relative contribution to the European M&A market also declined, with German activities accounting for slightly more than 7% of the total M&A value in Europe.
Investment from Germany's European neighbours dropped almost 60% compared to 2014, while US investment into Germany grew substantially. In addition, there has been a growing interest from Chinese investors and, according to Ernst & Young, Germany was again the preferred investment destination for Chinese companies in Europe. The takeover of KraussMaffei by ChemChina, announced in January 2016, could be the biggest Chinese acquisition in Germany to date.
The predictions made by market commentators for 2016 generally confirm the abovementioned trends. As European countries see a return in their economic growth, the interest of international investors is expected to increase further.
Have any significant economic or political developments affected the M&A market in your jurisdiction over the past 12 months? A strong capital markets environment and low interest rates fuelled M&A activity in 2015.
In Germany, and in Europe more generally, inbound and outbound activity was affected by the devaluation of the euro against the dollar. While inbound deals from the United States increased, the weaker euro decreased German investment targeting US companies.
Other economic and geopolitical factors that restrained M&A activity in Germany (and in Europe more generally) included:
- the ongoing debt crisis in Greece and the continued Eurozone uncertainty;
- falling oil and commodity prices;
- concerns over China's economic slowdown; and
- the civil war in Syria and the refugee crisis.
Are any sectors experiencing significant M&A activity? According to Mergermarket, the most active sectors in Germany in 2015 were:
- real estate (accounting for 26.8% of total M&A activity with a total volume of €18.9 billion);
- industrial and chemicals (accounting for 25.5% of total M&A activity with a total volume of €18 billion); and
- consumer goods (with total volume of around €13 billion).
Are there any proposals for legal reform in your jurisdiction? Changes in legislation and regulation may be introduced by the fourth EU Money Laundering Directive and the adjustment of the EU Shareholder Directive.
In addition, the EU Societas Unius Personae Directive, which deals with the introduction of a European single-person corporation, is currently being discussed in the European Parliament.
It is generally expected that the European Union – having already established the societas europae and societas cooperative europaea – will try to implement more European company forms.
Legislation What legislation governs M&A in your jurisdiction? The legislation governing mergers and acquisitions in Germany can be divided into regulations governing public transactions and those governing private acquisitions. In the case of public acquisitions, the primary and specific acts of legislation are the Stock Corporation Act and the Securities Acquisition and Takeover Act, which came into force in 2002.
For stock corporations and partnerships limited by shares which have their corporate domicile in Germany and are admitted to trading on a regulated market in Germany or another member state of the European Economic Area, the Takeover Act provides binding rules for both negotiated public offers and unsolicited takeover attempts. These rules concern the procedural steps to be taken by the bidder and establish limits to the defensive measures that the target’s management might take in response to a hostile bid.
The most important principles of the Takeover Act are that:
- all holders of shares that belong to the same class of shares must be treated equally;
- the shareholders must be provided with sufficient time and information to be able to make a reasonable and informed decision on the offer; and
- the target’s management and supervisory boards must act in the company’s best interest.
Acquisitions under German law are governed by the general rules of the Civil Code and the Commercial Code, as well as different general and special corporate regulations.
For example, the purchase and transaction of shares of a company can be defined as a purchase of rights according to Sections 433 and 453 of the Civil Code. The purchase of assets can be defined either as a purchase of rights or as a normal purchase under Section 433 of the Civil Code, depending on the subject matter of the asset in question. Mergers are subject to the Transformation Act if the companies have their registered place of business in Germany or where one party is in Germany and another party is in a European jurisdiction. Cross-border mergers first became possible with the introduction of the European stock corporation (societas europaea) in 2004. Cross-border mergers are now more generally available.
Regulation How is the M&A market regulated? In the past, there were few rules specifically concerning acquisitions. A certain level of control was introduced through the Act against Restraints of Competition. In most cases, merger clearance by the European Commission or, if the transaction has no EU dimension, the German Cartel Office will be required.
Moreover, the Securities Trading Act prohibits insider trading and manipulative statements that may have market implications, and provides an obligation to disclose significant events without undue delay (ad hoc publications).
Offers which are made under the Takeover Act are supervised by the Federal Financial Supervisory Authority (BaFin). Any person that decides to make a public offer must disclose this decision to BaFin and the affected stock exchanges without undue delay, and immediately thereafter announce its decision publicly and inform the target. Offers which do not comply with the Takeover Act can be prohibited.
Are there specific rules for particular sectors? Acquisitions of companies in sensitive areas (eg, crypto system manufacturing, military production and defence) and companies which operate a high-grade satellite system must be reviewed by the Federal Ministry of Economy, which is authorised to prohibit transactions.
Types of acquisition What are the different ways to acquire a company in your jurisdiction? Generally, acquisitions in Germany (as elsewhere) can be structured as asset or share deals. An asset deal will usually be entered into on the basis of private negotiations. In contrast, a share deal can take various forms. Although a private acquisition agreement is possible in all cases, in the case of listed companies, a tender offer is usually the only practical method. In addition, in many cases, an auction process will be performed in which each bidder can submit an indicative offer. Following these bids, the potential buyers will normally have the opportunity to carry out due diligence. After such exercise, the remaining bidders present their last and binding purchase offers.
In the case of an asset purchase transaction, it is of great importance that any assets and liabilities be specified and transferred on an individual basis. Assets and liabilities must be defined in the most accurate possible manner. Possible assets include:
- productions sites and real estate;
- contracts; and
- IP rights (eg, licences or permits).
In the case of a share deal, the shares of the company are acquired with the consequence that there is no need for an individual transfer of the assets or liabilities because they remain within the company. In a share deal, the rights of a minority shareholder should be considered only if a small percentage of the voting capital will be purchased or when determining the percentage or structure needed to gain control. Public companies can be acquired either through a public offer for the target’s shares, which is regulated by the Securities Acquisition and Takeover Act, or a legal merger under the Transformation Act. However, acquisitions (rather than mergers) are the more favourable method to acquire a company. This is a function of the absence of triangular mergers under German law. Merger agreements always require the completion of a complex formal procedure, which may involve management reports, audits, shareholder resolutions and recordings in the commercial register. Mergers are more commonly used as a second step to simplify an existing entity group after completing an acquisition.
Due diligence requirements What due diligence is necessary for buyers? The due diligence process can generally be divided into three or four main steps. Normally, an acquisition begins with preliminary due diligence (initial due diligence) which will provide an overview of the target. Following a number of preliminary agreements, full-scale due diligence/confirmatory due diligence will be performed, the complexity of which is determined by the parties. This exercise commonly includes reviewing the commercial, financial and tax, legal (corporate, commercial, real estate and litigation), human resources and organisational, cultural, environmental and IP, IT and technical relations of the target. The purpose of the buyer’s due diligence is to minimise risks arising from the intended purchase. Further, a management presentation can be part of the due diligence process, during which the executive staff, managing directors and board is presented and a plan for future business development is introduced. The whole process is typically concluded with a due diligence report that can be all-encompassing or reduced to key findings.
Information What information is available to buyers? During initial due diligence, the available information often comes from publicly accessible sources such as:
- the documents filed with commercial registers;
- published financial statements and stock exchange filings;
- analyst reports; and
- other generally available documents.
This is also the scope of the information to which the buyer will have access to if the target elects not to give out information – for example, in case of a hostile situation.
During confirmatory due diligence, the extent of the information reviewed depends on the individual agreement between the parties. Extensive due diligence usually involves the review of a large number of documents. A more cursory examination of the target concentrates only on the most relevant information. The buyer must always consider that extensive due diligence may be costly, but that less comprehensive due diligence increases the risk of undiscovered hazards.
Information will usually be made available in a data room (physical or electronic). After having reviewed the documents provided, the buyer will usually get the chance to ask questions in the form of a question and answer request list in regard to areas of concern or special interest.
What information can and cannot be disclosed when dealing with a public company? If the target is a public company, the management is generally obliged by corporate law (Section 93(1)(1) of the Stock Corporation Act and Section 13(1) of the Securities Trading Law) not to disclose confidential information. However, it can be permitted and, in some cases, if the survival of the company is at stake, even be required in the course of pre-bid due diligence. The executive board has the discretionary power to decide whether and to what extent the buyer may perform due diligence and how much information will be released, based on the company’s best interests. The Federal Financial Supervisory Authority interprets this dichotomy to mean that a seller of a public company’s shares is generally permitted to provide non-public and price-sensitive information to a genuine bidder. The bidder and purchaser must keep this information confidential and may not unfairly benefit from the possession of the exclusive information.
The insider trading rules will be considered breached if insider information causes the bidder to substantially deviate from its original plans – for example, if the buyer purchases more shares than originally intended or reduces an existing investment in the target after performing due diligence. To minimise such risks, careful documentation of all steps from the adoption of the original acquisition plan to its implementation is advisable. Due to these concerns, the extent of due diligence in relation to public companies will often be limited. In addition, the target will generally be reluctant to provide commercially sensitive information, especially if the bidder is a competitor.
Stakebuilding How is stakebuilding regulated? It is common to seek undertakings from key target shareholders in order to sell their shares, which may be structured either in hard or soft (revocable) form. The existence of irrevocable undertakings must be disclosed in the offer document and in voting rights notifications.
Undertakings by key shareholders are often structured as:
- contractual obligations with regard to the bidder in order to tender their shares if a public offer is made;
- options granted to the bidder in order to acquire their shares outside the offer; or
- a sale of shares subject to the condition precedent that the bidder acquires a certain minimum number of shares under the offer.
The biggest difference between these commitments is whether the bidder is obliged to purchase the shares and, if so, at what time.
Agreements with key shareholders may not be structured in a way that violates the principle of equal treatment of all shareholders. The payment of a premium for a control block is thus excluded.
A prospective bidder may generally build a stake in the target before launching a bid, but must follow the particular rules of the Securities Trading Act. If certain thresholds are met or exceeded (or shareholdings fall below such thresholds), the acquirer must notify the target without undue delay and no later than four trading days after the respective purchase (or sale) of shares. The target in turn must publish this information.
Further, the share purchases made by the bidder or certain associated parties pre-bid may affect the terms of a subsequent offer. When making a takeover offer, a bidder must offer at least the highest price it paid for the target shares during the six months before publication of the offer document.
Preliminary agreements What preliminary agreements are commonly drafted? Before due diligence and the share purchase or asset purchase agreement, the parties will normally agree to a confidentiality agreement or non-disclosure agreement concerning all of the data that will be exchanged between them and, in some cases, a process letter which contains a disclaimer to minimise liability. Following this first step, buyers and sellers commonly conclude a letter of intent or a letter of interest which can be binding or non-binding. The letter outlines the intended transaction and usually provides a timeline for the next steps. An exclusivity agreement forbidding negotiations with other potential buyers during the transaction is often requested by the bidder and granted by the seller if it is in a strong position. In addition, a term sheet is sometimes included in the letter of intent/interest which documents the key features of the later purchase agreements. The term sheet minimises the risk that the transaction will fail because of these main points before commencing potentially expensive due diligence.
Principal documentation What documents are required? In general, a share purchase agreement or asset purchase agreement is required.
Which side normally prepares the first drafts? Other than in auction processes, the first drafts are often prepared by the interested purchaser and their consultants and advisers.
What are the substantive clauses that comprise an acquisition agreement? The substantive clauses of an acquisition agreement concern:
- the existing status of the target and its subsidiaries (object of purchase);
- the purchase price, including payment conditions and possibly the agreement on an escrow;
- the structure of the sale and transfer of the shares or assets;
- the effective date;
- closing conditions and closing;
- indemnities and warranties;
- legal remedies;
- the statute of limitations;
- taxes and costs;
- arbitration or venue; and
- the governing law.
Shares and assets to be transferred must be precisely specified. Rules concerning the transfer of the shares can be organised in different ways. First, the transfer of the shares can be executed immediately with the signing of the share purchase agreement itself. There is also the possibility to transfer the shares subject to the condition precedent related to the closing. A further option is to transfer the shares on the basis of a separate transfer agreement in direct temporal connection with the closing date.
Further, agreements and liabilities in general cannot be transferred without the consent of the third party. In contrast, employment agreements in some cases are transferable by operation of law without the consent of other parties.
What provisions are made for deal protection? Deals are regularly protected by comprehensive non-disclosure agreements binding both sides. In addition, termination of the negotiations before conclusion of the final contract may be subject to a break-up fee which also covers the advisory costs of the parties. Termination fees are permissible under German law, but they must be justifiable in the company’s interest.
Closing documentation What documents are normally executed at signing and closing? The purchase agreement is executed at the date of signing. In addition, the contracts needed for the implementation of the acquisition may be in an agreed form or executed. In many cases, the closing date is defined in the aforementioned contracts. Typically, the signing of the purchase agreement does not immediately mean that the title to the relevant shares and assets has changed ownership. In accordance with the so-called ‘two-step-method’ commonly applied in Germany, the actual transfer of the rights is subject to the condition precedent of the closing date.
The period between those two dates can be up to a few months, depending on the complexity of the transaction. For example, closing conditions can be clearance by an antitrust authority or other regulatory body. The approval by the supervisory board, the executive board or the shareholders and the availability of financing are usually not accepted as closing conditions. On the closing day, the contractual parties will usually document the fulfilment of these conditions in a closing memorandum or closing confirmation.
Are there formalities for the execution of documents by foreign companies? In general, the execution of documents by foreign companies is not handled differently from the execution by a resident company. However, in the case of a real estate transfer, notarisation by a German notary is obligatory; a foreign notarisation will not suffice.
Are digital signatures binding and enforceable? Digital signatures can be binding and enforceable under Sections 126(3) and 126a of the Civil Code.
Foreign law and ownership
Foreign law Can agreements provide for a foreign governing law? In the case of a cross-border acquisition, the EU Private International Law, which is covered by the Rome I Regulation in Germany, allows the contractual parties to choose the applicable law freely.
Foreign ownership What provisions and/or restrictions are there for foreign ownership? German law does not generally impose restrictions on foreign investments in German companies. On the contrary, the attitude towards foreign investments is liberal. However, certain sectors (eg, media, banking and insurance) are governed by industry-specific rules granting German authorities the right to prohibit certain acquisitions. For example, the acquisition of a significant stake in a German bank by a foreign investor may be prohibited if it will jeopardise the effective supervision of the bank or if the acquirer is not regarded as trustworthy. The German authorities may also prohibit acquisitions by foreign investors of German business enterprises or shares in companies that produce defence industry products or encryption technology. In addition, acquisitions jeopardising the security or order of Germany may be prohibited.
Valuation and consideration
Valuation How are companies valued? The methods for valuing a company differ drastically. The main components for valuing a company are the share price and the value of assets.
In addition, a valuation method similar to discount cash flow and the discounted earnings method is common. In this context, the standards for the valuation of companies developed by the Institute of Public Auditors have gained great importance and acceptance. This approach to valuation consists of two different steps. The first step focuses on assessing the value of the target, while the second step focuses on the future potential of the company. The latter criteria will be especially relevant if the purchaser plans to continue the target's business.
Consideration What types of consideration can be offered? As consideration for the acquisition, the parties usually choose a cash payment or a share-for-share swap, or a combination of these types of consideration.
General tips What issues must be considered when preparing a company for sale? A general aim in preparing a company for sale is to make it as attractive as possible for potential buyers. This can include settling ongoing legal disputes and ensuring that compliance rules are fulfilled throughout the company.
What tips would you give when negotiating a deal? For a successful acquisition in Germany, the approach should be in line with local customs and practices, as well as the identity of the seller and the type of target. An aggressive acquisition strategy can in certain cases cause the transaction to fail. This particularly applies to acquisitions of small and medium-sized private firms. Sensitivity, diplomacy and persuasive bargaining are key to a successful transaction. In case of largescale transactions, a more aggressive advance can be effective.
If the seller is a private owner, he or she will normally have a strong emotional loyalty to the business. An important goal should thus be to convince him or her that the business will be in good hands when transferred to the purchaser.
The size of the negotiating team and the style and length of due diligence checklists can also influence the success of a transaction.
Hostile takeovers Are hostile takeovers permitted and what are the possible strategies for the target? Hostile bids are permitted in Germany. Takeovers are addressed only to the target’s shareholders, and there is no requirement that the target’s management consent to a public offer.
Nevertheless, hostile bids are the exception in Germany, although there has been a slight increase in hostile takeovers in the last few years, with the most recent hostile takeover action in 2015 (ie, the attempted acquisition of Deutsche Wohnen by Vonovia).
Warranties and indemnities
Scope of warranties What do warranties and indemnities typically cover and how should they be negotiated? Typically, the warranties cover the existence or non-existence of a variety of facts, circumstances and relationships. The extent of warranties is negotiated by the parties. The interests of the purchaser and the seller in this context are contrary and will therefore play a part in the negotiating strategy. Purchasers usually prefer warranty terms to be as complete and comprehensive as possible. Sellers, for their part, will normally try to sell on an ‘as is’ basis or to qualify the indemnities and warranties with their actual knowledge.
Typical warranties concern:
- the organisation and status of the target (corporate status, no insolvency, group structure and corporate documents);
- the shares and subsidiary interests (issuance and title to the shares, subsidiary interests and pending business transactions);
- balances and financial situation (compliance with generally accepted accounting principles and laws and true and fair view);
- ownership and rent of land and buildings (list of owned real estate, ownership and encumbrances, leased real estate and the sufficiency of real estate);
- IP rights (owned IP rights and licensed IP rights and know-how);
- assets (condition, integrity and maintenance);
- material contractual relationships (existence of contracts (list), completeness and status); and
- employees (list of employees, key employees, employment contracts, details of collective labour contracts and company agreements).
The warranties given by the purchaser are usually limited to existence, authorisation, compliance with laws and the ability to pay the purchase price.
Warranties will usually be structured as an independent guarantee in accordance with Section 311(1) of the Civil Code.
Indemnities often relate to taxes, environmental matters and existing litigation. They can be extended to include all issues that are revealed before the share purchase agreement is signed and which the buyer is expected to be responsible for, especially the findings from due diligence.
Limitations and remedies Are there limitations on warranties? The liability of the seller is always a significant element in negotiations and the language of the purchase agreement. A distinction should be made between the limits of liability for warranties on the one hand and other rights on the other. Normally, the statutory rules for liability concerning warranties are excluded and replaced by a liability system established in the purchase agreement. It is also common to set a maximum amount of liability for warranties and indemnities. Limitations of liability comprise contributory negligence, claims for compensation against third parties and other matters.
What are the remedies for a breach of warranty? German law contains no special rules for breach of contract concerning the acquisition of companies. On the basis of German statutory law, if a warranty turns out to be incorrect, the purchaser will generally have the option to:
- receive subsequent performance;
- reduce the purchase price;
- rescind the acquisition agreement; or
- claim damages for non-performance.
In practice, the right of rescission and the right to reduce the purchase price are usually excluded.
Most of the available statutory remedies are impractical. Therefore, the seller will normally be obliged to restore the buyer's situation to how it would have been had the warranty been correct, on the basis of a regular claim for damages and subject to a number of limitations.
Are there time limits or restrictions for bringing claims under warranties? It is customary to set caps and limits for claims under warranties.
The statutory limitation periods range from three to 30 years, depending on the nature of the claim. These statutory limits are normally amended by contract to reflect a smaller number of periods concerning groups of claims. Periods between one to five years are often agreed.
Tax and fees
Considerations and rates What are the tax considerations (including any applicable rates)? Tax considerations are always an important driver for the transaction and the purchaser and seller. Tax rules differ depending on whether the seller is an individual or a corporation and on where the target and the sellers are domiciled. Taxation also depends on the structure of the sale: a share deal will result in different taxation than an asset deal.
Tax considerations can usually be summarised as follows:
- Is the transaction harmful for any loss carryforwards (corporate income tax)?
- Are there any tax groups for corporate income tax, value added tax (VAT) or trade tax?
- Does the target own any real estate (real estate transfer tax)?
- Are there any ongoing or upcoming tax audits?
- Are there any binding rulings from the tax authorities?
- Are there any recent reorganisations in accordance with the Reorganisation Act?
- If it is an intercompany deal, does the transaction bear the risk of an increase in functions (Foreign Tax Act)?
- Is there a risk of exit taxation (Foreign Tax Act)?
- Are the involved parties partnerships or limited liability companies (transparent or non-transparent taxation)?
- Which jurisdictions are involved and are there any double tax treaties?
- Are any investment funds (as defined by the Investment Tax Act) involved?
- Are there any withholding taxes (for capital gains)?
- When it comes to an agreement:
- what are the guarantees and indemnifications;
- what are the responsibilities for tax assessments and appeals; and
- which party is responsible for payment of the applicable taxes?
Exemptions and mitigation Are any tax exemptions or reliefs available? Available tax exemptions or reliefs could be:
- the sale of a business as a going concern (no value added tax applicable);
- the holding of less than 95% of shares (no real estate transfer tax);
- the use of double tax treaties according to dividends and licences; and
- participation exemption rules (corporate income tax/double tax treaties).
What are the common methods used to mitigate tax liability? Methods to mitigate tax liabilities depend on the particular situation.
Fees What fees are likely to be involved? Typical fees incurred during transaction include fees for legal and tax advisers, notary charges, administrative costs and costs for financing.
Management and directors
Management buy-outs What are the rules on management buy-outs? Under general corporate law, the company’s management may not disclose confidential information about the company. In addition, the management must act in the best interest of the company. By preparing a management buy-out without the prior consent of the company, the management risks violating these obligations, which could lead to civil or even criminal liability. On its part, the purchaser runs the risk of being sued for inducing a breach of contract which can also cause criminal liability. To minimise these risks, the target’s management should involve all shareholders of the company in their plans as soon as practicably possible.
Directors’ duties What duties do directors have in relation to M&A? The target’s directors must act in the best interest of the company. This does not mean that they are prohibited from negotiating with potential purchasers. Depending on the circumstances, a change of ownership can be in the best interest of the company. If so, the directors must take all necessary efforts to ensure a successful transaction. A difficult question will always be to what extent confidential information can be shared with a potential purchaser. This must be considered carefully in each case.
Consultation and transfer How are employees involved in the process? Generally, normal employees will not participate in any way during the performance of the transaction. Only executive managers or shareholder employees will be involved in the transaction.
What rules govern the transfer of employees to a buyer? In the case of an asset deal, the transfer of the employment contracts is governed by Section 613a of the Civil Code. According to this provision, employment agreements and all rights and obligations under the various contracts transfer automatically as a matter of law when title to the assets are transferred to the buyer.
In the event of a share deal, the employer’s identity remains unchanged with the consequence that, subject to existing change of control clauses integrated in the employment contracts, the deal will not affect existing contracts.
Pensions What are the rules in relation to company pension rights in the event of an acquisition? Pensions obligations, still quite common in the German corporate landscape, can cause significant problems during a transaction because they often result in substantial and uncertain liability towards employees.
In the case of the share deal, the company’s identity remains the same, so that the new owner will be liable for the pension rights of former employees and existing employees.
In the case of an asset deal, the liabilities for pension payments to former employees will stay with the remaining part of the seller. Pension obligations to existing employees transfer as a matter of law to the new owner (Section 613a of the Civil Code), together with the employment agreements.
Pension obligations should always be discussed during the negotiations and be reflected in the purchase price.
Other relevant considerations
Competition What legislation governs competition issues relating to M&A? In Germany, competition issues are regulated by the Act against Restraints of Competition. It applies where the transaction has no EU dimension. In this case, the German Cartel Office must be involved. If the transaction has an EU dimension, as defined in the EU Merger Regulation, the European Commission has the exclusive power to investigate and, if necessary, prohibit the transaction. However, these rules apply only if the transaction is of a certain scale and economic value.
Anti-bribery Are any anti-bribery provisions in force? In Germany, bribery is prohibited with the risk of being subject to criminal liability under the Criminal Code. Further, the Act against International Corruption and the EU Anti-corruption Act can be relevant.
Receivership/bankruptcy What happens if the company being bought is in receivership or bankrupt? With receivership or bankruptcy of the target, the form of the transaction will change substantially. If the target is in receivership, the transaction will be considerably influenced by the Bankruptcy Act. In relation to the seller, the liquidator will effectively conduct the business and therefore will be responsible for the purchase negotiations. Third parties can dispose of the company's assets if they are authorised to do so by the creditors' meeting. This consent can be dispensed if the immediate sale is in the company’s best interest.
In most cases, a transaction out of receivership will be structured as an asset deal in which all or parts of the assets are sold, while liabilities will stay with the company. Such a transaction will only rarely be organised as a share deal. The precondition is usually a previous restructuring and debt relief.
With a view to the usual purchase procedure, it is common – unlike in normal transactions – that the first drafts will be made by the liquidator in the name of the selling party.