Going Public In Germany

The German Federal Reserve Bank (Deutsche Bundesbank) reported in February 1997 that the number of German stock corporations has increased from 2.147 (end of 1980) to 4.043 (end of 1996). In 1996 eleven Initial Public Offerings (IPO) with a total value of DM 21.4 billion were offered. This all-time high figure however, is characterized by the IPO of Deutsche Telekom AG which covered 96 % of that amount.

The major goal of an IPO is to finance future growth and expansion through equity. Since many German IPO's are part of a restructuring of family businesses, the present (family) shareholder(s) want to - inter alia - retain control, shift and diversify business risks, implement a viable succession scheme and motivate employees by implementing an employee stock ownership plan.