Investor Protest

Shareholder Revolts Sweep Across Germany

  • Why it matters

    Why it matters

    German companies may find it harder to secure shareholder approval for future capital hikes. Institutional investors felt sidelined by the Bayer-Monsanto deal and are demanding a greater say in future deals.

  • Facts


    • Munich Re’s management was forced to scale down its future capital raising plans to secure shareholder approval at its annual shareholders’ meeting last month.
    • Big German shareholders such as institutional investment firms are starting to limit the amount of authoritized capital they will allow companies  to create for future capital hikes.
    • Shareholders are getting stricter because some investment funds felt they were sidelined by Bayer’s mega-acquisition of U.S. seeds firm Monsanto which was agreed last year.
  • Audio


  • Pdf
Munich Re Hauptversammlung
Companies like Munich Re have already felt the wrath of shareholders at annual meetings. More is to come. Picture source: dpa

At the end of April, Munich Re only narrowly avoided an embarrassing defeat at its annual shareholders’ meeting. The world’s largest re-insurance firm wanted the authorization to raise extra capital by diluting shares if and when needed in the coming years. In the end it scraped above the 75-percent threshold of investors needed to back the controversial capital-raising plans.

And even that grudging blessing came only after executives scaled back their plans, pledging to increase its capital by a third of their existing share base at most in the coming years. Previously they’d asked for a cushion of almost 50 percent.

The tug-of-war between Munich Re and its shareholders is part of a growing trend in Europe’s largest economy. Other major German companies can expect to face similar resistance in the coming weeks.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.