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The most important facts in brief:
- In the case of a share deal, the Shares in the company sold to a new owner.
- A share deal has in principle have almost no impact under labor law.
- The works council must be informed of the planned sale, and the share deal can also change co-determination.
What is a share deal?
In a share deal, a buyer acquires the shares in a company. A share deal therefore results in a change of ownership of the company. Share deals are the most common way in which investors buy companies. The alternative to the share deal is the asset deal. In an asset deal, the buyer does not acquire the company, but the individual assets (e.g. the land, the factory, the individual inventories, etc.). Asset deals are used in particular to buy individual parts of a business or companies in need of restructuring.
What are the employment law implications of a share deal?
Share deals can have an impact on individual employment contracts. However, a share deal has the greatest impact on collective employment law.
- Employment contractsIn most cases, a share deal does not affect individual employment contracts. Occasionally, employment contracts contain change-of-control clauses. This means that there is a right of termination if the owner of the company changes. A share deal can also affect variable remuneration or share packages. In this respect, some contracts must be amended.
- Participation rightsIn the case of planned takeovers of listed companies, the management board must inform the works council of the target company. In addition, the economic committee may have to be informed in the context of a takeover, § 106 BetrVG.
- Group Works CouncilIf the share deal creates a group and there are therefore at least two works councils in the group, the works councils involved can set up a group works council.
- Co-determinationA share deal generally has no effect on co-determination in a company. A share deal only affects co-determination in a company in rare exceptional cases. If, for example, an existing group relationship is terminated or established as a result of the sale of shares, the share deal may have an impact on co-determination. For example, the share deal may result in the employee thresholds relevant for co-determination being exceeded or fallen short of.