Germany mulls tougher takeover rules after UniCredit deal - report

Germany is contemplating stricter takeover rules, potentially requiring bidders to make a second mandatory offer following the 50% mark, following the UniCredit takeover of Commerzbank, according to a Bloomberg report. Lawmakers are also considering increased disclosure requirements when buyers use derivatives to build stakes, with the discussions remaining confidential due to their non-public nature.

Currently, the mandatory bid only applies once a stake reaches 30%, but raising the threshold to 50% could make it more expensive for an acquirer to acquire a majority. A Federal Ministry of Finance spokesperson mentioned that a review of the existing takeover law is underway, though not yet completed. UniCredit quietly amassed a significant stake in Commerzbank using derivatives, followed by a takeover offer with minimal premium.

The German government, still holding a 13% stake from a financial crisis bailout, labeled UniCredit's strategy as hostile, aggressive, and opaque. Commerzbank's CEO, Bettina Orlopp, attributed the strong bid uptake to Germany's outdated takeover law, which permits extensive use of derivatives. Germany has previously overhauled its rules in 2011 after Porsche's attempt to take over Volkswagen, which resulted in Volkswagen becoming the world's most valuable company.

The reform introduced stricter disclosure rules for cash-settled derivatives and other instruments with economic exposure to shares. In the UK, a buyer must make a mandatory offer upon reaching 30%, with further increases between 30% and 50% necessitating additional offers. Once a holder has more than 50% of voting rights, the restriction generally dissipates.