Germans brought in line with UK takeover law

The new bill, which could still be sizeably changed as it passes through German parliament, comes after deep misgivings were raised over German takeover legislation during the hostile pursuit by UK mobile phone group Vodafone AirTouch of German rival Mannesmann.

Berlin wants the law changes to iron out confusion in future hostile takeovers in Germany and spearhead the rapid overhaul of its old consensus corporate culture.

However, investment bankers, according to the Financial Times, hit out at the bill as being laden with political language and lacking precise rules to cover takeovers, including essentials such as timetables.

Fears have also been raised that rules to prevent US companies from funding shares not listed in Europe are non-commercial and protectionist.

Berlin argues that the European listing for shares used to fund hostile bids is in line with US law that requires registration by predators with the Securities and Exchange Commission and compliance with US rules.

Chancellor Gerhard Schroder’s commission, which set-up Germany’s existing voluntary code ahead of a European directive, has had to negotiate with deep-seated opposition from unions and parts of government.

The new law will, however, retain strong employee rights that require predators to inform workers about the impact of takeovers and lay-offs, and protect minority shareholders rights.