Germany to tighten rules on foreign takeovers

As the coronavirus is raging the eurozone, even Europe’s largest economy has been hammered by its impact. While the German government is trying to mitigate the crisis, foreign firms are licking their lips looking at the weakened German companies. After lucrative offers from the US and China to German pharmaceutical and pharmacological enterprises, the German authorities decided to expand their powers to block hostile foreign takeovers of local companies. Currently, Germany is revising its policy in terms of the protection of domestic firms. Foreign acquisition of local companies will inevitably lead to a breach in the national security system. For this reason, the government is working on measures to ensure the supply of necessary medicines and medical equipment for pharmaceutical firms and provide loans for companies in other sectors. What is more, Germany is planning to pass a bill on domestic firms' protection in order to ward off foreign investors. The bill will allow the government to block takeovers of makers of vaccines, precursor chemicals, medicines, protective equipment, or medical machinery such as ventilators. The government’s decision to expand its powers was triggered by recent events. Not long ago, it was forced to interfere when the US was trying by any means to poach the German company, CureVac, and get access to the vaccine it was working on. Another pharmaceutical leading company, BioNTech, also received similar offers. It is also involved in the development of the vaccines against COVID-19.  The company's management rejected any offers about a takeover. Notably, in 2019, Germany already passed legislation to prevent takeovers of cutting-edge technological firms.