OCTOBER 2013

Focus on Germany

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Europe’s largest economy, Germany rapidly recovered from the financial crisis having initially been hit hard, thanks in part to its robust export regime. As a result, business in Germany is booming. Exports are strong, innovation is high and the quality of life is good, and unemployment is low.

W

ith the world’s M&A markets

seemingly

embarking upon a recovery of some sorts this year, Germany is

no different. For Q1 2013, Germany ranked eleventh in the world for outbound M&A activity, with a deal value of USD 1,253 million. This follows on from a pretty healthy 2012 for the German markets, with plenty of high profile deals being completed that

year. An example of such a deal is SAP’s acquisition of U.S. cloud computing group, Ariba, for USD4.3 billion. Another is Siemens’ acquisition of Invensys Rail in the UK for GBP1.7 billion.

According to Mergermarket’s Germany M&A Trend Report for Q1-Q3 2013, M&A activity targeting German companies saw €23.4 billion worth of deals in Q3 2013, down 20.4% from Q2 2013, but still the highest Q3 value since 2008 (€31.1 billion). Deal values during Q1-Q3 2013 (€58.6 billion) witnessed a 31.9% increase compared to Q1-Q3 2012 due to the country’s first mega- telecommunications deal on Mergermarket records (since 2001). This mega-deal was Vodafone Group’s acquisition of Kabel Deutschland for €10.4

billion, the highest valued deal for the country in Q1-Q3 2013. As a result, the UK was the most acquisitive country through Q1-Q3 2013 with a 61.87% (€19.6 billion) market share of Germanys’ total inbound M&A value (€31.7 billion).

There has also been positivity in the German private equity market with the second half of 2012 seeing a boost in both buy and sell activity, according to a report by global law firm, Allen & Overy.

This month, Lawyer Monthly takes a detailed look at the business and legal environments of Germany and addresses the challenges businesses, both domestic and foreign, face when navigating the corporate world there. Just some of the exclusive interviews we have as part of this are Clemens-August Heusch, in-house counsel from Nokia, Prof. Axel Pestke from the German Association of Tax Advisers and Angelika Pohlenz from ICC Germany.