German Merger Control and Minority Shareholdings: The Lufthansa / airBaltic Case

The German Federal Cartel Office reviewed Lufthansa’s minority stake in airBaltic

The recent review of Lufthansa's minority stake in airBaltic by the German Federal Cartel Office (FCO), as announced in the press release published on June 30, 2025, is a strong reminder that German merger control can apply even to small shareholdings – a key distinction from many other European jurisdictions, that should be taken into account.
 

Understanding “competitively material influence” under German law

In Germany, there is no fixed minimum shareholding threshold that automatically triggers merger control. Instead, the decisive factor is whether an acquisition – regardless of its size – grants the buyer competitively material influence over the target (Sec. 37 (1) No. 4 German Competition Act – GWB). This is a threshold that is set even lower than in the case of so-called joint control, where two or more undertakings have the possibility to exercise decisive influence over another undertaking (Sec. 37 (1) No. 2 GWB).

In addition to the acquisition of minority shareholdings, other factors must also be present that can give rise to material  influence, such as special (veto) rights to information, participation, and control – but at a lower level than with joint control.
 

Back to Lufthansa and airBaltic

In this specific case, Lufthansa acquired just 10% of airBaltic. However veto rights for Lufthansa over key decisions, and an expanded wet lease cooperation – i.e., the provision of aircraft and personnel – led the FCO to conclude that Lufthansa may indeed have obtained material influence. Given that the parties are direct competitors on certain flight routes and only a few alternative providers exist, this influence is also considered competitively material.

Despite these concerns, the transaction was ultimately cleared, as the affected routes qualified as de minimis markets with very low domestic revenues (less than EUR 20 million annually; Sec. 36 (1) sent. 2 no. 2 GWB). On other routes, no prohibition criteria were met.
 

Key Takeaways

• The case is an example of why companies should not underestimate German merger control – even with minority shareholdings. 
• Regardless of the exercise of rights or actual influence within the company, a notification must always be made if 25% or more of the shares in the company are acquired (c.f. Sec. 37 (1) No. 3b GWB).
• Another interesting fact: For minority shareholdings, the prohibition on cartels still applies –  that is, any anti-competitive agreements or coordination between the companies remain strictly prohibited.