Germany moves to block takeovers by foreign investors

News


13 Jul, 2017

Germany moves to block takeovers by foreign investors

The German government has approved plans to make it simpler for the state to veto takeover attempts of certain firms by foreign investors to protect the country’s “know-how”.

The move allows the government to block foreign takeovers if they “could endanger so-called critical infrastructure”, particularly software firms that work with banks, airports and hospitals, managing cloud data or telecommunications, reported German newspaper the Süddeutsche Zeitung.

The general aim of the Economy Ministry’s tender, approved by Chancellor Angela Merkel’s cabinet on Wednesday, is to stop Germany losing their control to foreign countries.

State secretary, Matthias Maching, said: “We know that there is critical infrastructure that is attractive to ¬investors. We are indeed an open economy, but we are not naive.”

The new policy would make it harder for ¬investors from outside the European Union and would slow down the takeover process by giving the government double the current time to carry out its investigations on any bid, allowing up to four months. The measure also ensures authorities can ascertain whether companies attempting a takeover of German firms was not established in the EU as a sham to get around regulations.

The move is a late response to the controversial takeover of Augsburg ¬robotics maker Kuka last year by the Chinese firm Midea, reported the newspaper. Germany is also allegedly working on a proposed reform at EU level, as Brussels is responsible for questions about trade.

German, French and Italian economy ministers warned the EU Commission in February about a “possible sell-off of European expertise”.

French president, Emmanuel Macron has also called for an EU process designed for vetting and even blocking unwanted takeovers from non-European companies.

The German government’s efforts to protect its firms come just days after the G20 summit in Hamburg where members reached a compromise to “fight protectionism”, while allowing nations to use “legitimate trade defence instruments” to protect markets.

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