BERLIN, July 27, 2018 (News Wires) - Germany is stepping up efforts to prevent companies in critical industries from falling into Chinese hands, taking a stake in a high-voltage network operator and planning to veto the sale of a machine-tooling business. State bank KfW agreed on Friday to take a 20 per cent stake in high-voltage energy network operator 50Hertz, fending off an offer from China's State Grid. Berlin also plans to veto the planned sale to Chinese investors of Leifeld Metal Spinning, customers of which include companies in the aerospace, chemicals and automotive industries, according to a government source familiar with the matter. Talks are ongoing, but the cabinet is likely to announce its objection to the proposed deal next week, the source said. The planned veto was first reported by German magazine WirtschaftsWoche. The measures come amid concerns in some countries - such as the United States, Germany, France, Australia and Britain - that China and other rivals are gaining access to key technologies via takeovers. Germany's economy ministry this week said that it wanted better tools for hindering takeovers of German companies by investors beyond the European Union that do not conform with market regulations. Britain also plans to tighten foreign takeover rules. The German government had already tightened controls on foreign investments last year after a series of high-profile takeovers by Chinese companies, making it possible for Berlin to intervene if a buyer amasssed a shareholding of 25 per cent. However, German industry association BDI said that KfW taking the stake in 50Hertz was problematic. "Such a one-off decision runs the risk of hurting the climate for foreign investment," BDI manager Stefan Mair said, highlighting that the laws introduced last year stated that security concerns arose only when a shareholding exceeds 25 per cent.
