(1) The representative bodies of each of the legal entities involved in the merger are to submit a detailed written report (merger report) in which the following is explained and justified in legal and economic terms:
1. the merger;
2. the details of the merger agreement, or its draft, and in particular
a) the share exchange ratio including the valuation methods used to determine it, or the information as to the membership in the acquiring legal entity, as well as
b) the amount of the cash settlement to be offered, including the valuation methods used to determine it.
The representative bodies may also jointly submit a merger report. The report is to note any particular difficulties encountered in valuing the legal entities and the consequences the merger will have for the ownership interest held by the holders of shares. Where a legal entity involved in the merger is an affiliated enterprise in the sense of section 15 of the Stock Corporation Act (Aktiengesetz – AktG), the report also is to include information on all matters of the other affiliated enterprises that are relevant for the merger. The disclosure obligations of the representative bodies extend to include these matters as well.
(2) The report need not address facts that, were they to become known, would be suited to cause a greater than insignificant disadvantage to one of the legal entities involved or to an affiliated enterprise. In such event, the reasons are to be set out for which the facts were not included in the report.
(3) The report is not required if all holders of shares in the legal entity involved waive its being drawn up. The declarations of waiver are to be recorded by a notary. The report is not required, furthermore:
1. for the legal entity being acquired and for the acquiring legal entity if
a) all shares in the legal entity being acquired are held by the acquiring legal entity, or if
b) all shares in the legal entity being acquired and in the acquiring legal entity are held by one and the same legal entity, as well as
2. for that legal entity involved in the merger that has only a single holder of shares.