Federal Economics Minister Katherina Reiche (CDU) wants to expand the control of foreign investments in Germany. A new Investment Review Act is intended to enable the Economics Ministry to review stakes in German companies more comprehensively in the future. In particular, the influence of states outside the European Union is to be placed under greater scrutiny.
The basis is a draft bill from the Federal Ministry of Economics, which was reported on by the „Handelsblatt“. However, the draft has not yet been coordinated between the ministries of the Federal Government and can still change during the further legislative process.
Stakes of 15 Percent or More to be Reviewed
According to the plans known so far, the investment review for listed companies will take effect from a stake of 15 percent. This would mean a lower threshold than previously applied in certain cases.
The ministry justifies the planned changes with the altered geopolitical situation. According to the draft, reference is made to increased risks to Germany’s national and economic security.
The investment review is intended to become particularly relevant when an investor from a state outside the European Union wants to acquire shares in a German company. Until now, special regulations have applied to certain European states.
Complete Takeovers in Focus
Another change concerns the re-acquisition of a company. According to the plans, a foreign investor could be reviewed again if they wish to completely take over a German company.
This means that the review would not be tied solely to an investor’s initial entry. A subsequent expansion of the stake could also become relevant for security policy.
The background to this is the growing importance of strategically vital companies and industries. When it comes to foreign investments, the issue is therefore not just the origin of the capital, but also the question of whether an acquisition could pose risks to Germany’s economic or national security.
New Rules for Norway and Switzerland as well
The change regarding the group of affected states would be particularly far-reaching. According to the draft, the investment review will in future be generally targeted at investors from states outside the EU.
This would also affect European countries that have previously been exempt from certain regulations. These include Norway, Switzerland, Iceland, and Liechtenstein. For investors from these states, the stricter review rules could therefore also apply in the future.