The Involvement of the Financial Sector in the Restructuring of the Economy

Daniel Detzer, Nina Dodig, Trevor Evans, Eckhard Hein, Hansjörg Herr and Franz Prante
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Daniel Detzer: Berlin School of Economics and Law
Trevor Evans: Berlin School of Economics and Law
Hansjörg Herr: Berlin School of Economics and Law

Chapter Chapter 11 in The German Financial System and the Financial and Economic Crisis, 2017, pp 175-187 from Springer

Abstract: Abstract After World War II the German company network was characterised by strong ties between management, capital, and labour and by a low level of M&A activity. M&A activity increased in Germany from the 1990s, mainly as a result of developments associated with German unification, and continued to rise in the 2000s. The increase was a little smaller than in Europe as a whole, and much smaller than in the US or the UK. Although Germany did not adopt an Anglo-US-American type of M&A regime, changes in the strategy of bigger German banks and enterprises encouraged M&A from the early 1990s on. This was supported by the policies of the German government and the European Commission. These developments involved moderate changes rather than a decisive leap towards a liberal market economic model with easy and frequent takeovers. Hostile takeovers have not been very common in Germany and, if they take place, they are generally of a managed type, involving a compromise between all the stakeholders. The German M&A regime can be judged as hybrid, combining elements of a market radical approach with a strong non-market stakeholder orientation. Vodafone’s hostile takeover of Mannesmann in 2000 was a shock for the traditional German corporate governance model and led to a form of consensus that takeovers should be possible, but not in a market radical way.

Keywords: Corporate Governance; German Company; Minority Shareholder; Employment Protection; Corporate Control (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:fimchp:978-3-319-56799-0_11

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DOI: 10.1007/978-3-319-56799-0_11

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