German Chancellor Angela Merkel’s cabinet unveiled Wednesday draft rules aimed at fending off undesired company takeovers by foreign state-controlled funds.
The rules are to address the concerns of Merkel’s government that foreign state funds may take over key stakes of sensitive and strategic industries like telecom, banks and energy sectors. The draft rules give a commission, headed by the German Federal Economy Ministry, power to block bids for 25% or more of a target company by funds or companies whose majority owners are not nationals of the European Union.
German Economy Minister Michael Glos said “public order and security” will be the principal criteria to be considered in the approval process. “The majority of foreign investments won’t be affected by the draft law,” said Glos, who set out details of the proposals. “Germany is and remains open to foreign investments,” Glos added.
Based on a US model, Germany’s plans could lead to further attempts across the 27-member EU aimed at blocking foreign investment incursions into sensitive industries. Under the plans, foreign investors would have to notify the government when purchasing more than 25% of a major German company. (Xinhua)