The Frankfurt stock market landscape will experience a significant upheaval in September 2025, as the leading German stock index, the DAX, undergoes a rebalancing. As Deutsche Börse announced in Frankfurt on Wednesday, two prominent companies will be leaving the DAX: sports car manufacturer Porsche and pharmaceutical and laboratory supplier Sartorius. They will both be relegated to the MDAX, the index for mid-sized companies.
In their place, two newcomers will be admitted to the top tier of the stock market: the real estate platform operator Scout24 and the plant engineering company GEA. The changes, which take effect on September 22nd, reflect the dynamic forces of the German stock market, with the market capitalization of freely traded shares serving as the decisive criterion for promotion and relegation. In the current round, the airline group Lufthansa was also considered a potential candidate for promotion, but failed to return to the circle of the forty largest listed companies.
The criteria for promotion and relegation
The composition of the DAX, which has comprised forty companies since the last reform in autumn 2021, is reviewed quarterly by Deutsche Börse. The decision to include or exclude companies is based primarily on the market capitalization of the so-called free float, i.e., the value of freely traded shares. Recent changes demonstrate that even established brands like Porsche and fast-growing companies like Sartorius are not immune to relegation if their metrics necessitate a rebalancing. Porsche, which joined the DAX less than a year ago following its IPO, must now vacate its position. Sartorius, which has had an impressive growth story in recent years, will also be demoted to the MDAX.
Newcomers Scout24 and GEA are benefiting from this development. Scout24 is widely known in Germany for its platforms in the real estate and automotive sectors. Inclusion in the DAX will give the company greater visibility among international investors and underscore its status as a major player in the German digital economy. For plant engineering company GEA, which has previously been listed in the DAX, the return to the top tier also represents confirmation of the successful path it has taken.
Lufthansa misses the return
The situation at Lufthansa has attracted particular attention in recent weeks. The airline group, traditionally one of the flagships of the German economy, was forced to leave the DAX during the far-reaching crisis years of 2020. At that time, the collapse in air traffic and the government bailout of the company led to a drastic revaluation of the company's stock. Since the beginning of the year, however, Lufthansa shares have recovered and experienced a remarkable increase in value, fueling speculation about an imminent return to the DAX. The Deutsche Börse's decision not to reinstate Lufthansa for the time being demonstrates that, despite its recent recovery, the company does not yet meet the necessary criteria for inclusion in the leading index.
The fact that Lufthansa has once again missed promotion represents a loss of prestige for the company, even if it has no direct impact on its operating business. A listing in the DAX is considered a seal of quality and increases attention from global investors and funds. However, it is important to emphasize that a relegation does not have to be permanent, as the example of Commerzbank demonstrates. The financial group was forced to leave the DAX in 2018 and managed to return in 2023, partly thanks to the expansion of the index from 30 to 40 stocks. This example could serve as a glimmer of hope for Lufthansa that a return to the top stock market league is possible in the long term, provided the company's positive development continues.
The relevance of index changes
Although a company's membership in an index has no direct impact on its business activities, the stock market shifts are of great importance. In particular, so-called index funds or ETFs (Exchange Traded Funds), which track the DAX one-to-one, must adjust the composition of their portfolios. If a company like Porsche moves from the DAX to the MDAX, these funds must sell their Porsche shares to acquire shares in the new DAX members Scout24 and GEA. These shifts, which take place prior to the changes taking effect, can have a short-term impact on the share prices of the affected companies. In the long term, however, these effects generally become less significant, as a company's share price depends on its fundamental data.
Deutsche Börse's quarterly review of the DAX thus reflects the constantly changing German economy. It reveals which sectors and companies are gaining in importance and which are losing influence. The inclusion of Scout24 in the DAX underscores the increased relevance of the digital platform economy, while Lufthansa's stagnation underscores the ongoing challenges facing the travel industry after the turbulent years of the pandemic. The adjustment of the DAX is an ongoing process that ensures that the index remains a representative reflection of the forty largest and most important listed companies in Germany.