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Germany Prepares Law for Foreign Takeovers
Germany Prepares Law for Foreign Takeovers

Germany Prepares Law for Foreign Takeovers

Germany Prepares Law for Foreign Takeovers

The German government has said it wants to be able to intervene earlier if a non-EU investor acquires 15% of a German company. Berlin has been wary of Chinese and US investors moving to take over key tech firms.

Berlin wants to lower the threshold for intervening in future investment and takeover bids by foreign firms, according to a report published early on Tuesday, DW reported.

The new change would enable the German government to more easily review and possibly veto takeover bids of German companies that are deemed important for national security, German newspaper Welt reported.

In the future, the economy ministry would be able to intervene if an investor outside of the European Union acquires a “direct or indirect” shareholding of at least 15% in a German company, according to a draft law that was seen by Welt. Currently, Berlin can only intervene if an investor acquires a shareholding of 25%.

The changes would particularly pertain to companies involved in defense, infrastructure, or security-related technology.

German Economy Minister Peter Altmaier told Welt that moving the threshold was necessary in order to better protect businesses in sectors deemed “sensitive.”

“Until now, we’ve only been able to carry out reviews when at least 25% of a company’s shares have been acquired. Now we want to lower this threshold so we can review more acquisitions in sensitive economic sectors,” he added.

“Of course we want companies to continue investing in Germany,” he told the paper. “But there’s also our responsibility to protect security interests, public order and public safety.”

The proposal would primarily target Chinese investors, with officials concerned that a recent rise in Chinese takeovers would eventually drain Germany’s industries and lead to a loss of know-how in key, high-tech fields.

 

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