Exit in German Mittelstand

Isabell Stamm

Over the past two decades, we can observe a gradual shift in ownership transfer in the German Mittelstand from a strong preference towards family internal succession towards selling the business externally. Adopting a sociology of ownership perspective, the configuration of transfer is seen to undergo major change in terms of who is considered a legitimate transfer partner, the rules and practices of transfers, and the valuation of the firm. Selling the business turns the business itself into a commodity and fosters marketization of Mittelstand firms. Using a case study design, the project identifies social, institutional, and cultural conditions that foster this change. The study is based on the analysis of qualitative interviews with intermediaries in the field of succession (bankers, tax consultants, M&A advisors, platform operators, academics, journalists, associations) as well as a large number of documents (such as laws and parliamentary debates, news articles, documentation of chambers of commerce, publications by intermediaries, platforms). A grounded theory approach is applied to identify relevant mechanisms that may explain a legitimation of business sales and the emergence of a market for Mittelstand firms.