Europe should temporarily ban Chinese takeovers, Weber says

Manfred Weber is the leader of the centre-right European People's Party (EPP) group in the European Parliament. [© European Union 2020 - Source : EP]

The European Union should impose a temporary ban on Chinese takeovers of companies that are currently undervalued or have business problems because of the coronavirus crisis, the leader of the bloc’s largest political alliance said on Sunday (17 May).

Manfred Weber, a senior German conservative and head of the centre-right EPP grouping in the EU Parliament, told Germany’s Welt am Sonntag newspaper that he was in favour of declaring a twelve-month ban for Chinese investors who want to buy European firms.

“We have to see that Chinese companies, partly with the support of state funds, are increasingly trying to buy up European companies that are cheap to acquire or that got into economic difficulties due to the coronavirus crisis,” he said.

The European Union therefore should react in a coordinated way and put an end to the “Chinese shopping tour” by imposing a twelve-month moratorium on sales of European companies until the coronavirus crisis is hopefully over, Weber said.

“We have to protect ourselves,” he added.

Europe races to shield virus-hit firms from bargain hunters

Fears that cash-rich corporate raiders could use the coronavirus crisis to swoop on weakened European firms were perhaps best exemplified by Donald Trump’s alleged bid for a German biotech firm working on a vaccine.

China and the EU launched negotiations on a comprehensive investment agreement in 2013, and have held numerous rounds of talks since then. Sticking points have included reciprocal market access and a level playing field.

Chinese and EU leaders are slated to meet at a special summit in September, though the coronavirus pandemic has cast some doubt on whether the meeting can go ahead as planned.

“China will be our biggest competitor in the future, in economic, social and political terms,” Weber said. “I view China as the strategic competitor for Europe, that represents an authoritarian model of society, that wants to expand its power and replace the United States as a leading power.”

Europe should take China seriously and show respect for the country as a world power, “but above all we have to be vigilant,” Weber said.

EU aims to bar 'predatory' takeovers of weakened firms

EU trade ministers vowed on Thursday (16 April) to protect strategic European companies weakened by the virus-triggered downturn from “predatory” takeovers.

The German government agreed last month to tighten rules to protect domestic firms from unwanted takeovers by investors from non-European Union countries.

The move comes at a time when Europe’s biggest economy, and the EU as a whole, are reconsidering relations with China in the face of increased investment in critical sectors by Chinese state-owned enterprises.

German officials have described the Chinese takeover in 2016 of Bavarian robotics firm Kuka as a wake-up call that underlined the need to shield strategic parts of the economy.

An attempt by China’s State Grid in 2018 to buy a stake in power grid operator 50Hertz also focused German minds. After Berlin failed to find an alternative private investor in Europe, German state-owned bank KfW stepped in to keep the Chinese out.

EU warns virus could expose firms to foreign buy outs

The head of the European Commission warned Wednesday (25 March) that the economic aftermath of the coronavirus could leave strategic private sector firms exposed to foreign takeovers.

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