Margrethe Vestager: We will protect technological companies from foreign countries



09/04/2017 2:33 PM


European Commissioner for Competition Margrethe Vestager said that the European Union (EU) is preparing a legislative project that will protect European technology companies from hostile takeovers by foreign companies or states. Thus, the EU reacted to earlier calls from Germany, Italy and France. The leading countries are concerned about the growing interest of Chinese state companies.



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At Ambrosetti economic forum held this weekend in Italy, head of the European Competition Commission Margrethe Vestager made it clear that the EU authorities are not going to ignore the growing interest of foreign companies, including state companies, in aqcuiring European companies with particularly valuable and promising technological developments. "We have heard fears about foreign - and often state – investors that are swallowing European companies and their key technologies," said Ms. Vestager quoted by Bloomberg. "This is a difficult question. It requires careful consideration before we decide to begin some action. We are currently working on this and we are planning to submit particular proposals this autumn."

In August, it became known that the European Commission received a letter from representatives of Italy, Germany and France. The paper asked the EU authorities to "pay attention" to a number of attempts by foreign investors, including state ones, to absorb European companies – developers of "key technologies". Representatives of Italy, Germany and France asked the EU authorities to determine whether such attempts of foreign investors are politically motivated. According to European media, this appeal is yet another consequence of events of last summer, when Chinese company Midea paid € 4.6 billion for German manufacturer of robotics Kuka. Then the German authorities did not initiate an official investigation and approved the deal, but Economy Minister Sigmar Gabriel said he intended to initiate a "public discussion" of the controversial deal. The agreement caused fears that the Chinese company, which produces washing machines and air conditioners, will have access to strategically important for Germany technologies in the field of robotics.

The EU authorities are concerned about the growing activity of Chinese investors, who are increasingly trying to buy out European companies engaged in the technological, energy and industrial sectors. At the same time, as European countries fear, not only China can gain access to the latest technologies of European countries, but also receive a competitive advantage, given that the intellectual property of Chinese companies themselves is strictly protected by the PRC authorities and remains inaccessible to European investors, even in the case of mergers. 

At present, only in 13 of the 28 EU countries local regulators have sufficient powers to control investments and takeovers in local companies and are able to adequately assess such transactions from the point of view of national security.

The European Union is notoriously known for disagreements between leaders of the member countries on this issue. Nevertheless, the number of those who favor tight monitoring of transactions on the territory of the EU is growing against the backdrop of increasing activity of Chinese investors. 

source: bloomberg.com


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