Foreign investors, especially from China, are keen on German know-how – even in sensitive areas. According to a report, the federal government will soon be able to stop such takeovers to protect strategic industries.According to a report in the German daily Süddeutsche Zeitung, the German government is planning to give itself more veto power in certain cases of company takeovers. In the future, the sale of German companies that could lead to the loss of important know-how abroad could be stopped. According to the newspaper, this was the result of a regulation issued by the Ministry of Economic Affairs. The German cabinet gave the green light on Wednesday morning. For the first time, the new rules also define a concrete "threat to public order" with regards to company acquisitions, for example, when critical infrastructure is involved. If necessary, operators of such infrastructure should also be better protected against the entry of investors from outside the European Union. What's more, the new regulations apply to domestic software companies that develop programs for electricity or telecommunications networks, power stations, water supply systems, banks, hospitals, airports or railway stations. Companies with access to data stored in the cloud are also to be subject to more stringent takeover rules. A vigilant government With the new rules the government can now take four months to review takeover plans – twice as long as currently possible. In this time, information can be gathered from intelligence services. Investigators can also look to see if front companies have been set up within the EU for the purpose of a takeover. State Secretary Matthias Machnig told Süddeutsche Zeitung: "We know that there is critical infrastructure which is attractive for investors," adding "we have an open economy, but we are not naive." A response to the Kuka deal Last year, foreign investors bought more German companies than ever before. Above all, buyers from America, Europe and China have taken over a record number of 873 German companies. This has raised a concern about the loss of German expertise. The government's veto right is aimed mainly at Chinese investors. China's takeover of European – and especially German – industrial companies has raised fears that Beijing will gain cheap access to key technologies. According to the newspaper, the veto right is a response to the takeover of German robot manufacturer Kuka by Midea, a Chinese appliance manufacturer. In December, the takeover of semiconductor maker Aixtron by a Chinese investor was stopped when the US government blocked the sale of Aixtron Inc., a California-based subsidiary of the semiconductor equipment manufacturer, because of security concerns. tr/bb (dpa, Reuters)
