Acquiring a dealership or commercial agency can bring a number of benefits to businesses. The customer base of a dealer or sales representative can complement their own customer base and thus lead to inorganic growth and valuable synergy effects. In the same industry, the takeover leads to a reduction in competition. Since more and more sales representatives and dealers are looking for a successor, the takeover can often be carried out on favorable terms. As Lawyer and specialist lawyer for commercial and corporate law as well as specialist lawyer for international business law I regularly advise buyers and sellers on the takeover of other companies, especially in the area of trade and of commercial agencies. If you want to conclude a corresponding contract with your company, with which you would like to take over the company of a dealer, in particular a specialist dealer or wholesaler, or commercial agent, you should consider the following most important aspects.
The structure of the deal: share deal or asset deal
First of all, the structure of the deal is in the foreground. Do you want to take over the whole company or just take over the customer base? In the first case, you buy the shares in the company (share deal), i.e. the shares in a GmbH or GmbH & Co. KG, in the second case you buy part of a company (asset deal), while the rest of the company remains with the seller. Both cases differ in their corporate law, tax and antitrust consequences.
Due Diligence: Checking the target company, checking contracts with customers and suppliers for antitrust and competition law
Before making a purchase, you should carefully examine the target company (due diligence), in particular the contracts with customers and suppliers to ensure they are compatible antitrust and competition law. These include, in particular, exclusive assignments of territories and customers, requirements for online trading, compulsory branding and non-competition clauses, exclusive delivery obligations or rights, the terminability of important customer contracts, license agreements, restrictions on competition, or actions that represent unfair competition. In the case of a dealer company, such as a car dealer, the balance sheets, risks from leasing transactions, compliance with contractual dealer specifications and compliance with antitrust and competition laws must also be checked.
With such an examination of the target company as part of a due diligence, it is regularly necessary to disclose relevant information on details of the customer base, such as contracts, sales or prices. If the parties are competitors, for example because a commercial agent or dealer wants to take over another commercial agent or dealer in the same business area, such an exchange of information may violate antitrust law. This is because the disclosure of information that enables a competitor to adjust its future pricing behavior has a restrictive effect on competition. An exchange of information must then only take place within very narrow limits and, in particular, must not allow price-sensitive information to be disclosed.
Purchase of the customer base: define contract with customers exactly
If you only buy the customer base of a dealer or a sales representative, it is necessary to precisely define the respective contract with the customer before you conclude the contract. It should also be noted that the customer must agree to the assumption of the contract. Likewise, data protection regulations must be observed before disclosing the customer. A violation of this can also mean a violation of competition law. In addition, the contract must regulate the right to commissions and commission entitlements, in particular whether these remain with the commercial agent or are purchased.
Purchase price: A valuation of the company is recommended
The contract with which the company of a dealer or commercial agent is taken over should regulate the following points with regard to the purchase price: The purchase price will regularly be based on a valuation of the company. From a lawyer's point of view, this is highly recommended. Because neither the law nor any other law stipulates how the purchase price is to be determined. As a rule, a company valuation is based on the most recent annual financial statements, which are weighted and evaluated using a standard valuation method. However, when purchasing a customer base from a dealer or sales representative, there is additional content to consider.
Include commission claims
In the case of commercial agents, future commission claims must also be included in the purchase price determination. Because these largely determine the future value of the customer base. The contract on the takeover should also regulate whether the old or the new commercial agent is entitled to the so-called entitlements to commissions on transactions that have already been initiated or concluded. However, the risk of non-payment of commissions must be taken into account. In the case of a contract with a dealer for his customer base or business, the margin minus the costs must be included
Compensation claims of the commercial agent
A commercial agent is entitled to a compensation claim upon termination of the commercial agency relationship. If the dealer was involved in the sales organization and sales of the supplier like a commercial agent, for example through reporting obligations, non-competition clauses and marketing obligations, and if the dealer is directly or indirectly obliged to transfer his customer base under the dealer contract, the dealer is also entitled to compensation to. However, according to the HGB, this does not apply if the dealer or commercial agent relationship is transferred to someone else. The selling dealer and commercial agent should take this omission of his right to compensation under the law into account in his planning when concluding the contract.
Customer Allocation and Non-Solicitation
If the entire customer base is not to be transferred, but certain customers remain with the seller, this must also be regulated in the contract that both parties want to conclude. At the same time, it must be clarified that with such a division of the customer base, non-solicitation is applicable. Legally, this is a customer allocation that can represent a restriction of competition under antitrust law. This restriction of competition is inherently prohibited under antitrust laws, but may be permissible in the case of a business transfer. This should be checked carefully by a lawyer in order not to risk a violation of antitrust or competition law.
If a post-contractual non-competition clause is to be imposed on the purchasing dealer or commercial agent, this must be expressly regulated. A waiting allowance is to be paid to the commercial agent, but not to a dealer.
Guarantees in the company purchase agreement
Guarantees about the condition of the company are also common in every company purchase agreement. Giving guarantees for the future for a customer base is risky, since no one can reliably assess how a customer base will develop. Other typical guarantees, especially when purchasing shares in the company operated by the commercial agent or dealer, relate to the correctness of the company information, the correctness of the annual financial statements and tax returns, the timely payment of social security contributions or the proper continuation of the company. Guarantees also relate to circumstances that must not exist, in particular infringement of intellectual property, violations of applicable laws and regulations, in particular competition law, commercial law and antitrust law, or the abuse of a dominant position or a position as a strong company.
In addition, it must be ensured that important contracts with the manufacturer or supplier, i.e. existing commercial agent or dealer contracts as well as contracts with important customers, have not ended and cannot be ended in the foreseeable future.
If the shares in a GmbH are to be purchased, it must also be taken into account that the contract is signed by a notary. Otherwise the contract is ineffective.