Voting Rights Announcements according to WpHG (German Securities Trading Act)
Pursuant to the German Securities Trading Act (Wertpapierhandelsgesetz) investors are required to notify Merck KGaA, Darmstadt, Germany and the German Federal Financial Supervisory Authority (BAFin) if certain thresholds are reached or crossed.
In case of an investor with a multi-level structure, each company in the chain of companies controlled by the investor is subject to the obligation to notify reaching, exceeding or falling below the legal thresholds for significant shareholdings pursuant to sections 21 ff German Securities Trading Act (WpHG). If, for instance, an investor acquires 3% of the voting rights in Merck KGaA, Darmstadt, Germany indirectly via a second-tier subsidiary, the parent company, the subsidiary, and the second-tier subsidiary must notify that they have reached the 3%-treshold, although the investor does not hold 9% but only 3%, effectively. This fact is indicated in the notification that must refer to the attribution of voting rights held by subsidiaries (section 22 para 1 sent. 1 no. 1 or section 22 para 1 sent. 2, sent. 1 no 2 -6 WpHG). Publication by the issuer is strictly bound to the contents of the notification of the investor.
Effective February 1, 2012, an amendment of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG) extends investors' obligation to notify reaching, exceeding or falling below the legal thresholds for significant shareholdings to other (financial) instruments that do not grant an enforceable right to acquire shares, but make such an acquisition possible. This stricter requirement of transparency may lead to an increase of voting rights notifications.