Co-determination

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Case Study | Think global, act local, or the art of converting to an SE

An international group of companies was planning strategic realignment of a corporate structure that had evolved over many years. We advised on implementation across 50 companies with more than 1,600 employees, both strategically and operationally. 

The project specifically included designing and establishing two SEs, one of them at group parent level, with all the necessary groundwork. In addition to the dualistic SE at the head of the group in Germany, one of the new subgroup entities was converted into a monistic SE as part of the reorganisation. Each of these phases had its own special legal, strategic and operational challenges for the client and for our team.

The measures were accompanied by a significant streamlining of the corporate structure. A further aim was to enable the client to focus on a few key lines of business. Interdisciplinary expertise is essential in a transformation of this nature. In addition to advice on employment law and the law relating to business transfers, in-depth advice was provided on corporate and tax law. One of the requirements was that the corporate governance rules of the group’s management board should be replicated in the monistic SE. Trade tax aspects also needed to be taken into account. 

Experience and teamwork were key to overcoming these challenges. Specialists from CMS in several countries were brought in. Together with the client’s team, we crafted the ideal target structure and identified the most effective way of switching to the new set-up. The employee involvement required when establishing each of the SEs was managed efficiently from Germany, drawing on colleagues from across the international CMS organisation. Only a small number of negotiating sessions were required. The project benefited in this respect from the fact that the workforce and the relevant employee representatives had been kept informed in a timely and carefully coordinated manner.

As a result, it was possible to stick to the ambitious project schedule, with the entire process expected to take around two years, given the need to accommodate the group’s operational needs. Here, as in similar projects, we found that careful planning, smart preparation and efficient project management are major success factors.

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