Exit in German Mittelstand

Isabell Stamm

Over the past three decades, we can observe a gradual shift in ownership transfer in the German Mittelstand from a strong preference towards family internal succession towards external sale of the business. From a sociology of ownership perspective, the configuration of transfer is undergoing 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. This turn towards exit in the German Mittelstand is studied from four perspectives in this project. Using archival documents and expert interviews, one of its studies traced the shift from internal succession to sales from the 1990s until today. A second focused on the rise of intermediaries and in particular of firm platforms to structure a market for Mittelstand businesses. A third study conducted in cooperation with the Institute for Mittelstand in Bonn used data from the German Tax Payer Panel to show that the number of firm sales increased by 80 percent between 2001 and 2018. The most recent and ongoing study on this topic explores the purchasing and sales activities of members of the wealth elite as part of their wealth accumulation and legitimization.