Germany Strengthens Overseas M&A Procedures... "Cannot Lose Key Industries Amid COVID-19"

[Asia Economy Reporter Naju-seok] The German government has decided to strengthen the merger and acquisition approval process to prevent the overseas acquisition of key industries. This is a response to growing concerns that Germany's core companies could easily be taken over by foreign entities as the novel coronavirus disease (COVID-19) spreads worldwide.

On the 8th (local time), German Chancellor Angela Merkel announced plans to reinforce the Foreign Trade Act to block acquisitions of German companies by entities from outside the European Union (EU). Previously, acquisitions could only be blocked if a security threat was anticipated, but now mergers and acquisitions can be prevented even in cases of potential interference.

The German government is taking measures to prevent the transfer of Germany's key industries overseas amid the spread of COVID-19. Earlier, the European Commission also issued guidelines to block foreign direct investments citing security threats and other concerns.

Bloomberg reported that the German government's move is driven by concerns that Chinese companies might target German firms involved in artificial intelligence, digital technology, and battery-related industries.

With this new measure by the German government, foreign companies will face restrictions on accessing corporate know-how before acquiring German companies.

This content was produced with the assistance of AI translation services.