ZCZC
BCN-19
GERMANY-CHINA-MERGER-TRADE
Germany preparing first veto against Chinese takeover: report
FRANKFURT AM MAIN, July 27, 2018 (BSS/AFP) – Berlin is preparing for the
first time to veto the takeover of a German company by Chinese investors for
“strategic” reasons, local media reported Thursday, a year after ministers
toughened up rules over fears the country could lose vital technologies.
Business weekly Wirtschaftswoche reported the economy ministry will
prevent Chinese investor Yantai Taihai Corporation from buying Leifeld Metal
Spinning.
The 200-employee firm produces high-strength parts for the car and
aerospace industries that also have nuclear applications.
“The cabinet will make the decision on August 1,” the magazine said.
A spokesman for the ministry declined to comment on the specific case when
contacted by AFP.
But he said that “the economy ministry can examine whether a purchase
endangers public order or the security of the Federal Republic of Germany.”
The government can take a closer look if a foreign investor plans to buy
at least 25 percent of a firm and last year modified rules to extend the
range of firms eligible for a probe under “critical infrastructure”
provisions or considered to be developing “key technologies”.
Ministers also doubled the amount of time civil servants have to examine
deals by non-European Union or European Free Trade Association (EFTA) buyers
from two to four months.
The moves followed a string of high-profile takeovers or attempted
takeovers of high-tech German firms by foreign companies.
Robot maker Kuka was bought by China’s Midea in 2016, while factory
automation specialist Grohmann Engineering was snapped up by US-based Tesla
Motors.
A study by consultancy EY found Chinese companies bought 54 German firms
last year and invested $13.7 billion in Europe’s largest economy.
In March, then-economy minister Brigitte Zypries said continuing
approaches from China might encourage Berlin to lower the ownership threshold
that could trigger a government probe of a foreign investment.
BSS/AFP/HR/1015