Twelfth Draft Amendment to the German Merger Control Thresholds

On June 4, the German Coalition Government published a draft of the 12th amendment, which aims to update the German Act Against Restrictions of Competition in several ways (Draft Amendment). The key takeaways for clients are as follows:

• The Draft Amendment recasts the principles governing when acquisitions of smaller, innovative companies must be notified to the German Federal Cartel Office. If adopted, it will potentially expand notification obligations to capture target companies with effectively no current links to Germany.

  • As a counterbalance, the Draft Amendment aims to shorten and simplify the review of such transactions by adding a stand-alone notification procedure including a simplified notice and a “fast-lane” review procedure with a two-week review period.
  • Board documents (e.g., presentations, memos, minutes) move into the spotlight for the first time during the early-stage review by the German authority.
  • Parties will need to submit such documents as part of the simplified notice: given the routine submissions under the transaction value threshold (TVT), the importance of document creation and document review pre-submission becomes even greater beyond the United States (for more information on Ropes & Gray’s AI-powered deck review tools, see here).
• In parallel, the Draft Amendment seeks to limit the number of notifications for routine acquisitions of established, revenue-generating companies by setting higher turnover thresholds for such transactions. However, it proposes that such notifications are accompanied by internal documents.

Higher Turnover Thresholds

The Draft Amendment raises the turnover thresholds under which transactions need to be notified:

• Combined aggregate worldwide turnover threshold of all parties to a transaction of EUR 750 million (up from EUR 500 million);
• German turnover of at least one party to the transaction of EUR 75 million (up from EUR 50 million); and
• German turnover of another party to the transaction of EUR 20 million (up from EUR 17.5 million).

This general increase aims to lower the number of transactions reviewed by the Federal Cartel Office by 13-14% per year, but given the moderate increase (14% for the second domestic threshold and 50% for the first), it is unlikely to affect most foreign transactions, which typically involve corporate groups with high global turnovers. The second domestic threshold (to be increased to EUR 20 million) is explicitly maintained at the low double digits to allow review of transactions on regional markets in Germany. Overall, the Draft Amendment acknowledges that the increase is largely driven by inflation adjustment.

Expanding the Applicability of the Transaction Value Threshold

The TVT was originally introduced to capture “below-threshold-acquisitions” of companies that do not yet generate substantial turnover in Germany – and may therefore escape the turnover thresholds – but have significant competitive potential, often by virtue of an innovative technology, a pipeline product business model, or other corporate asset.

The TVT’s main aim is to capture acquisitions of targets by larger and established companies prepared to pay a multiple of the target’s current enterprise value (i.e. at least EUR 400 million), and ultimately to prevent killer acquisitions.

The Draft Amendment elevates this TVT to a regular element of the German merger control notification thresholds, as opposed to a gap-filling set of rules previously envisaged to apply only exceptionally:

• If the aggregate worldwide turnover threshold (EUR 750 million for all parties) and the German turnover threshold for one party (EUR 50 million) are met, in practice almost all transactions may be notifiable, even if the target does not record any revenue, provided that:

  • the consideration value for the transaction exceeds EUR 400 million; and
  • the target undertaking has substantial operations in Germany or is expected to have substantial operations in Germany in the near future.
• In relation to the pivotal substantive operations test, the Draft Amendment contemplates two major departures from the more recent interpretation and application of the TVT:
  • it cements that the TVT applies across the board, even to companies active on established markets, and not only to small, innovative target companies with a high (unrealized) commercial potential;
  • it lowers the local nexus requirements in relation to a target company’s activities in Germany at the time of the acquisition by extending the scope of the TVT to companies that currently do not conduct any (pre-commercialization) activities, but can be reasonably expected to become active in Germany in the foreseeable future.

• The Draft Amendment confirms that the TVT also captures companies active on “mature markets” (i.e., markets on which products or services have generated turnover over a substantial period), if its other conditions are met. This is consistent with the expansive interpretation laid down in July 2025 by the German Federal Court of Justice (Case KVR 77/22) regarding the types of target companies which should fall within the scope of this set of provisions. The court decision departed from the reasoning of the German legislator when the TVT was first introduced in 2017, and from the German Federal Cartel Office’s (FCO) published guidance – both envisaged the TVT as filling an enforcement gap by capturing acquisitions of small companies with high revenue potential and active on immature markets that do not yet generate substantial turnover.

  • The examples envisaged were (i) startup-like providers of digital solutions already used by a large number of users, or which processed / had access to data of German customers, and (ii) innovative companies in the life sciences space conducting R&D aimed at introducing a product in the near future. The Draft Amendment nominally maintains that the TVT aims to capture targets that may bring forward disruptive innovations. However, by explicitly including companies active on mature, established markets within the scope of the TVT, it makes an assessment of whether a target is expected to bring disruptive innovation less tangible: product and service innovation is also common on established markets (e.g. electric mobility in the long-standing personal transportation space), and whether it can be seen as “disruptive” requires an assessment that parties will rarely be able to make with sufficient certainty.
  • The Draft Amendment effectively acknowledges that this analysis has become moot and instead reiterates that its aim is legal certainty by applying the TVT on equal footing with the turnover thresholds and subjecting “all cases that fulfil its conditions” to a filing requirement. Nevertheless, the focus should remain on targets active in the digital and life sciences space, which the Draft Amendment cites in its examples, and which have historically been the focus of FCO enforcement.
• The Draft Amendment expands the applicability of the TVT even where a target is not yet active in Germany but is expected to enter the market in the foreseeable future (“has or is expected to have substantial domestic operations”). This is a notable departure from the current TVT, which only applies if a target is active in Germany at the time of notification.
  • Today, relevant domestic operations include: commercializing products or services in Germany; local presence in the form of users or processing of domestic user data (for digital services); R&D activities before market entry (e.g. in development hubs, local facilities, or by third-party contractors); pre-commercialization product launch preparation (e.g. contracting distributors, market access services providers, or other consultants); and the presence of tangible assets (e.g. infrastructure, local facilities, employees) or intangible assets (e.g. IP rights or trademarks registered in Germany).
  • The Draft Amendment adopts a forward-looking approach that also includes these activities even if they take place outside Germany but are aimed at a global product launch (including in Germany) within a reasonable timeframe. Parties will need to forecast when market entry in Germany can be expected, accounting for the specific products and services and industry-specific innovation cycles.
  • The legislative rationale states that if market entry by the target occurs later than two years, this is typically beyond a reasonable forecast period which the parties should apply; the TVT is thus unlikely to be triggered. However, this assumes that the target is active in an industry in which product development and launch typically occur within this timeframe (e.g. smartphone device iterations). Where product development typically goes through long development cycles (e.g. pharmaceutical compound development and clinical trials), a launch in Germany with a five-year timeframe may still mean that the TVT is triggered.
  • The Draft Amendment provides that market entry should not be hypothetical, and its scope should not be marginal, but also that those limitations on the applicability of the TVT should be interpreted narrowly. Possible scenarios in which parties may be able to raise this defence include a product launch (also) in Germany which lacks economic justification (e.g. very small potential addressable markets with low margins) and/or small local footprint (e.g. low number of customers / users). The current decisional practice of the FCO suggests that arguing on that basis poses a significant hurdle.

Additional Procedural Step for Transactions under the TVT – “Simplified Notice”

The Draft Amendment adds an additional review phase for all transactions falling under the TVT (“Phase 0”). Given the TVT’s expanded scope, it aims to enable a less burdensome, simplified submission on an accelerated timeline. In summary:

• All transactions triggering the TVT are subject to a mandatory notice to the FCO.
• The FCO has two weeks to either decide that it has no jurisdiction or that the transaction requires review, in which case it will request the parties to submit a formal notification, triggering the customary one-month review period (Phase 1).
• The notice is designed as a simplified submission – while it requires the parties to include some of the information typically submitted in a formal notification (e.g. description of the parties and their corporate groups, turnover data and the value of consideration, description of activities and domestic operations, and overlaps and vertical relationships at group level), the parties do not need to provide market share calculations or detailed information on equity stakes and participation chains for share acquisitions.
• The notice is also subject to new disclosure requirements: the parties need to outline the economic rationale of the transaction, and substantiate this with board documents, internal analysis, minutes and presentations.
• The parties must provide information on future activities to assist the FCO in assessing whether these may lead to launching products or commencing other activities in Germany, and to assess whether the new expanded local nexus requirements are met, as well as potential overlaps and vertical relationships.

Impact on Dealmaking

If adopted in its current form, the Draft Amendment will expand the number of transactions subject to review in Germany.

Today, the TVT often requires parties to conduct a comprehensive analysis of a target’s competitive potential and the nature, scope, and timing of its activities in Germany, with parties often opting for a full notification on a fail-safe basis.

The Draft Amendment doubles down on subjecting transactions to review in Germany, while the counterbalance of a simplified notice appears unlikely to allow for straightforward, simple submissions.

Nevertheless, the aim is for the majority of cases to be dealt with within the simplified notice procedure, without opening a full formal review:

• The inclusion of potential future activities in Germany removes one of the few tangible limitations on the TVT’s applicability – parties will no longer be able to assess notifiability based on a target’s current local activities in Germany at the time of analysis. Instead, the burden shifts to establishing when commercial activity in Germany can be reasonably expected (on the assumption that targets acquired for high consideration values will typically contemplate entering the German market). The implications are far-reaching. For example, in theory, pre-commercial R&D for an important pharmaceutical compound outside Germany may trigger an obligation to submit a notice in Germany, assuming market entry is anticipated within a maximum of five years. Excluding (potential) domestic operations becomes harder and contingent on narrow exemptions such as establishing that the contemplated activities will be negligible.
• The submission of a simplified notice is expected to entail an obligation to produce internal documents, which until now typically had to be produced only during the in-depth Phase 2 review. Although the information requirements for the simplified notice are lower than for a full filing, the notice still requires the bulk of the information submitted in a formal procedure. In practice, being over-inclusive when preparing the simplified notice is more likely to prompt a no-jurisdiction decision within the two-week period, meaning the envisaged lighter burden may not materialize.
• The inclusion of a preliminary, two-week review period preceding the regular one-month period effectively adds to the review timeline for transactions triggering the TVT. While the Draft Amendment contemplates that the wide majority of simplified notices will not lead to a full review, the parties to a transaction will have to account for the possibility that the FCO opts to open a formal investigation. Coupled with the broad scope of deals to which the TVT is likely to apply going forward, this means that the common estimate for a merger control procedure in Germany is extended to six weeks in practice.
• The Draft Amendment openly states that expanding the jurisdiction of the FCO over additional transactions ultimately aims to enable referrals to the European Commission under Art. 22 of the EU Merger Regulation.

The Draft Amendment is a first ministerial draft, which is open for comments by trade associations until June 19, 2026. Following the consultation, the Draft Amendment will need to pass additional procedural steps, including a vote in Parliament. The timing of the adoption of its final form is in flux, given the approaching parliamentary summer break, but entry into force before late 2026 appears unlikely. The FCO is likely to await the adoption of the amendments before it updates its official guidance, which as of today is not applicable in its entirety.