Germany to block foreign takeovers with taxpayer cash

Germany to block foreign takeovers with taxpayer cash
Kuka, which was taken over by Chinese appliance giant Midea in mid-2016, helps build a Ford-Werk in Cologne in April 2018. Photo: DPA
The German state should "in very important cases" block foreign firms from buying up companies working on key technologies by itself stepping in as an investor, Economy Minister Peter Altmaier said Tuesday.

“The state should only be able to buy shares in a company in very important cases and for a limited time,” Altmaier said at a Berlin press conference outlining a “national industrial strategy 2030”.

SEE ALSO: Germany to tighten rules on foreign takeovers

“We plan to create a national investment mechanism” to implement the scheme, he added, promising clear rules rather than “capricious” decisions on when to intervene.

Altmaier's project is a marked break with conventional German economic
thinking, which prescribes minimal state involvement in markets.

But since 2016, when China's Midea took over Bavarian industrial robot
maker Kuka, politicians have been sounding the alarm about vital building
blocks of German prosperity being sold off — especially when Beijing is in
the background.

Berlin in December tightened takeover rules for “critical infrastructure”
sectors like energy, defence and telecoms, lowering the threshold for the
government to review and possibly block foreign firms taking stakes in German ones.

SEE ALSO: With eye on China, Germany toughens rules for foreign takeovers

But the new shield will extend even further, covering companies in
“platform” businesses like artificial intelligence — vital for developing the
self-driving technology expected to upend the country's mighty car industry.

Altmaier said that “the prosperity of millions” is at stake, with a choice
between leading in developing new technologies or becoming an “extension of someone else's workbench”.

Germany has not experienced the same decline of industrial jobs as
comparable European economies like France or Britain.

According to EU statistics authority Eurostat, some 18.6 percent of Germans worked in industry in 2016, compared with 10.5 percent in France and just nine percent in the UK.

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