Germany is considered one of the largest markets in Europe for shareholder activism with many high-profile targets. How has activism been evolving over recent years?
Dr. Thyl Haßler (TH): Germany has become the second largest target market for activist shareholders in Europe, just behind the UK Until 2023, the number of public campaigns remained consistent. In 2024, there was a slight decline and in the first half of 2025, only a few campaigns were made public. We consider it likely that this decline is due to various uncertainties affecting the German economy, such as declining industrial productivity, high costs, and geopolitical developments.
However, even though most activist approaches do not result in public campaigns, we believe that most publicly listed companies in Germany have been approached by activist shareholders in recent years. Recent activist campaigns have focused on increasing corporate value, with emphasis on breaking up conglomerates and the composition of management and supervisory boards. ESG issues have taken a back seat over the past two years, as short-term financial performance has become a higher priority. A notable trend is the growing involvement of domestic institutional investors, who increasingly support activist campaigns.
How are activists now perceived by boards at Germany-listed companies?
Frederic Wuensche (FW): Historically, activist campaigns were rare and met with strong resistance from the conservative corporate culture in Germany, especially when using aggressive tactics, including public campaigns.
This has changed considerably. Successful campaigns leading to the breakup of conglomerates, better financial performance, improved governance, and a focus on ESG issues has shifted board perceptions of activism. Boards of publicly listed companies are now more open to engaging constructively with activists and considering their proposals.
This shift is due in part to activists' "soft approach," favoring private discussions with the board before public campaigns. Consequently, many boards now recognize activists as valuable sources of insight and strategies for enhancing corporate value and performance.
German corporations are undervalued compared to other European markets, with low price-to-earnings ratios and valuation multiples.
Germany's dual tier governance structure can present a unique challenge for activists. What barriers does this create when considering a campaign for board change?
FW: Germany's two-tier board system includes an executive board for day-to-day management and a supervisory board overseeing and advising it. The supervisory board is also able to appoint and dismiss executive board members.
Consequently, shareholders can only elect supervisory board members, not executive board members, limiting direct proxy fights against the latter. To influence the executive board, activists must first secure a seat on the supervisory board. They can do this by proposing candidates at the annual general meeting or having a company-nominated candidate. Once on the supervisory board, they can influence the executive board's composition and management.
However, this process is lengthy and risky. Activist candidates often fail to get elected, as seen with Petrus Advisers' candidates at Aareal Bank in 2019, PrimeStone Capital's candidate at Brenntag in 2023, and Private Values Media's candidates at Mister Spex in 2025.
Moreover, once elected, a candidate on the supervisory board cannot represent or take instructions from the activist to whom he is affiliated. However, some activists have managed to exert influence without formal representation. Recently, Active Ownership Capital successfully campaigned for the resignation of Gerresheimer AG's CFO without having a seat on the supervisory board.
US activists continue to be drawn to the market with Sachem Head Capital Management and Inclusive Capital Partners among those to find success in gaining board representation in recent years. What is enticing such players to the market?
TH: German corporations are undervalued compared to other European markets, with low price-to-earnings ratios and valuation multiples, offering lucrative opportunities. Additionally, Germany's industrial sector faces challenges such as declining productivity, geopolitical issues, US tariffs, high costs and lower demand, leading to weak returns on capital and slow valuation growth.
This volatility encourages continued activist engagement in Germany, further driven by a recovering M&A market.
Leadership change and break-up campaigns have presented as some of the key demands in many headline campaigns in the market over recent years. How are these likely to continue to focus investors for the rest of the year and on into 2026?
FW: We expect these demands to remain on activist agendas in the coming years, as evidenced by public campaigns in 2025. In April, 7Square called for the separation of DHL from Deutsche Post AG, arguing DHL was significantly more profitable than the rest of the group. Similarly, Gerresheimer AG faced demands from activists, including Active Ownership Capital, to sell its moulded glass business. This pressure led Gerresheimer AG to initiate a sales process for this division in August. In the summer of 2025, a group of activists, including Private Values Media, attempted to replace the executive and supervisory boards of the online eyewear retailer Mister Spex. Although their candidates were not elected, both the executive board and two supervisory board members resigned shortly after. These examples highlight the continued focus on these trends and suggest they will remain central to activist strategies.
Reproduced with permission from Diligent Market Intelligence. For further information please visit https://www.diligent.com/.
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