Response to consultation on joint Guidelines for the prudential assessment of acquisitions of qualifying holdings

Go back

Question 2. Do you consider the level of detail used in the draft Guidelines to be appropriate?

Yes, Eumedion believes that the level of detail of the draft guidelines is appropriate, with the exceptions mentioned in our answer to Q1.

Question 3. Which approach identified above do you consider to be the most appropriate, Option A or Option B? Please explain your answer.

Eumedion believes that Option B is most appropriate. According to the Draft Guidelines ‘control’ means the relationship between a parent undertaking and a subsidiary, as defined in, and determined in accordance with the criteria set out in article 22 of Directive 2013/34/EU or a similar relationship between any natural or legal person and an undertaking. According to Directive 2013/34/EU control is not only based on holding a majority of voting rights. Control also exists if the proposed indirect acquirer is able to appoint the majority of the members of the administrative, management or supervisory body of the direct acquirer. In this respect we would like to note that the influence of a shareholder on (for example) a credit institution in practice is relative. The reasons are i) the strategy of the company is the board’s responsibility and not that of the shareholder, ii) due to the fit and proper test not all people can be appointed as administrative, management or supervisory director and iii) the credit institution must comply with the applicable directives and regulation (e.g. sound and prudent management). Against this background we are of the opinion that the combination of the multiplication criterion and the control criterion is most suitable to determine the actual size of the holding of a proposed indirect acquirer in the target company and hence its influence on that company.

Name of organisation

Eumedion Corporate Governance Forum