November 29, 2019 / 9:25 AM / 13 days ago

Germany plans rapid state intervention to protect key industries

BERLIN, Nov 29 (Reuters) - German Economy Minister Peter Altmaier wants to set up a new government body with powers to decide quickly whether to take stakes in key domestic companies to prevent foreign takeovers.

Altmaier presented his new industrial strategy on Friday, including plans to set up a standing committee which, as a last resort, could decide to take stakes in German companies that produce sensitive or security relevant technologies.

The stakes, which would be acquired by Germany’s KfW state development bank, would be held temporarily. This can already be done in some cases under German law, but Altmaier said the process was too slow.

“Structures have to be created to take the necessary decisions faster and more efficiently than has been the case thus far,” he said in his “Industry Strategy 2030”.

Under the plans, Germany also aims to step up screening of non-European investors that want to buy into firms in key sectors, in a move widely seen as targeting Chinese state-backed investors.

The plans come at a time when the European Union as a whole is reconsidering its industrial strategy and relations to 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. (Writing by Paul Carrel; Editing by Mark Potter)

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