In the 709 member Bundestag, a majority is 355 and the CDU/CSU won 246 seats (200 CDU and 46 CSU), the SPD 153, the AfD 94, the FDP 80, The Left 69, and the Greens 67.

The agreement came after a failed attempt by the CDU/CSU to enter into a Jamaica coalition with the Greens and the FDP, which the latter pulled out of citing irreconcilable differences between the parties on migration and energy policy.

At the 2013 German federal election, the incumbent government composed of the Christian Democratic Union of Germany (CDU), the Christian Social Union of Bavaria (CSU), and the Free Democratic Party (FDP) had failed to maintain a majority of seats.

The CDU/CSU then successfully negotiated with the Social Democratic Party of Germany (SPD) to form a grand coalition for the third time.

In the 2013 German federal election, the FDP only won 4.8% of party-list votes; this cost it all of its seats in the Bundestag.

If a voter has cast a first vote for a successful independent candidate or a successful candidate whose party failed to qualify for proportional representation, their second vote does not count to determine proportional representation; however, it does count to determine whether the elected party has exceeded the 5% threshold.

Parties representing recognized national minorities, such as Danes, Frisians, Sorbs, and Romani people, are exempt from the 5% threshold but normally only run in state elections.

Although these parties have some differences, such as the CSU's opposition to the previous government's immigration policies,[7] the CDU and CSU share the same basic political aims and are allowed by the Regulations of the Bundestag to join into one parliamentary Fraktion (a parliamentary group composed of at least 5% of the members of the Bundestag, entitled to specific rights in parliament) after the elections,[8] as they do in the form of the CDU/CSU group.

The CDU/CSU and the SPD remained the two largest parties in the Bundestag, but both received a significantly lower proportion of the vote than they did in the 2013 German federal election.

Despite improving their results slightly and thus gaining a few more seats, the Left and the Greens remained the two smallest parties in parliament.

[30][31] In the final days of the preliminary talks, the four parties had still failed to come to agreement on migration and climate issues.

[34] On 24 November, Schulz said he wants party members to be polled on whether to form another grand coalition with CDU/CSU after a meeting with President Frank-Walter Steinmeier the day before.

[39][40][41] On 12 January, the CDU/CSU and the SPD announced that they had reached a breakthrough in the preliminary talks and agreed upon an outline document to begin formal negotiations for the grand coalition.

[43] The conference voted in favour of accepting the conclusion of preliminary talks and launching formal coalition negotiations with the CDU/CSU.

The agreement stipulated there would be rises in public spending, an increase in German financing of the EU and a slightly stricter stance taken towards immigration.

[48][49] SPD chairperson and Europe expert Martin Schulz was to step down as party leader and join the cabinet as foreign minister,[50] despite having previously stated that he would not serve under a Merkel-led government.

[51] However, only days after these reports were published, Schulz renounced his plan to be foreign minister reacting on massive criticism by the party base.

[56] The result allowed the new government to take office immediately following Bundestag approval of Merkel's fourth term on 14 March 2018.