On August 26, 2019, the DCA dismissed a claim based on allegations of gun jumping against the appointment of a new member of Ceconomy AG’s (“Ceconomy”) supervisory board.[1]

The new nominee for a vacant supervisory board seat had to be appointed by the competent local court because the shareholders of Ceconomy, which itself holds a majority stake in the Media- Saturn-Holding GmbH (“Media-Saturn”), could not agree on one. The local court appointed the CEO of Ceconomy’s third-largest shareholder, Freenet AG (“Freenet”), holding a 9.15% stake. Convergenta Invest GmbH (“Convergenta”), which is not a shareholder of Ceconomy itself but is Ceconomy’s joint venture partner in Media- Saturn, appealed the appointment. Convergenta submitted that the nomination conferred Freenet a “competitively significant influence” and therefore constituted a notifiable concentration under German merger control law. Since it had not been notified, Convergenta argued that the nomination amounted to an infringement of the standstill obligation and should therefore be considered invalid.

The acquisition of a competitively significant influence requires that—in addition to a minority shareholding of below 25%—there are “additional factors” that give the acquirer the possibility to influence the target and thus make the situation comparable to an acquisition of 25%. According to German case law, such additional factors, can be, e.g., the right to appoint (supervisory) board members, information rights, de facto influence in shareholder meetings, or the acquirer’s superior knowledge of the market. However, the DCA found that none of the requisite “additional factors” for the assumption of a competitively significant influence were given in the present case. To the contrary, it stressed that (i) there were two shareholders with much larger stakes (22.71% and 14.33%, respectively), (ii) Freenet could not block decisions at general meetings, and (iii) Freenet’s CEO was only one of 20 supervisory board members. In light of Ceconomy’s diversified portfolio, the DCA also noted that it was irrelevant that Freenet was an important partner for Ceconomy as regards the sale of mobile phone contracts.

[1]              Aufsichtsratsbestellung (VI-W (Kart) 5/19), DCA decision of August 26, 2019, an extract has been published in Neue Zeitschrift für Kartellrecht (NZKart 2019, 562). The full decision has yet to be published.