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German industry body warns against takeover protection measures
October 17, 2016 / 1:12 PM / a year ago

German industry body warns against takeover protection measures

BERLIN, Oct 17 (Reuters) - The head of the VDMA German industry association warned on Monday against proposals to protect high-tech companies from unwanted takeovers, saying it would be better to ensure that German businesses are treated fairly when investing abroad.

Newspaper Welt am Sonntag had reported that Deputy Economy Minister Matthias Machnig had in the past week sent to government members a paper containing six key points for reviewing investment at the European Union level.

The paper foresees wide-reaching rights for the EU and national governments to prohibit company acquisitions by investors in non-EU countries, the newspaper said.

Thilo Brodtmann, head of the VDMA, responded on Monday by saying that functioning competition and open markets are essential for the future of the machinery industry.

“These basic rules should not be thrown overboard,” Brodtmann said in a statement.

“Mechanical engineering companies in Germany, therefore, do not want extended protection from foreign investors, but above all to have the same conditions for their own investments abroad as there are in the EU.”

Any examination of possible protective measures should be taken with utmost care, he added.

“The right of an entrepreneur to sell his property freely should not be restricted for reasons of daily policy,” he said.

Takeovers by Chinese investors have prompted the German government to consider whether it needs to do more to protect key technologies.

Chinese household appliance manufacturer Midea bought German industrial robot maker Kuka for 4.5 billion euros ($5.04 billion) this year and Chinese chipmaker Sanan Optoelectronics last week said it had been in contact with lighting group Osram about a potential acquisition or cooperation deal.

German Economy Minister Sigmar Gabriel has called for a European-wide safeguard clause which could stop foreign takeovers of firms whose technology is deemed strategic for the future economic success of the region. ($1 = 0.8928 euros)

Reporting by Caroline Copley; Editing by David Goodman

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