March 25, 2020 / 9:00 AM / 5 days ago

German minister: We must prevent sale or break-up of our key firms

BERLIN (Reuters) - Germany must protect its economic structure during the coronavirus crisis and prevent the sell-off or break-up of key companies, Justice Minister Christine Lambrecht told the Handelsblatt business daily.

FILE PHOTO: German Minister of Justice and Consumer Protection Christine Lambrecht attends the weekly cabinet meeting in Berlin, Germany, November 13, 2019. REUTERS/Fabrizio Bensch

“It is imperative that we protect the economic structure of our country during the crisis and prevent the sale or break-up of important companies,” Lambrecht said.

“To this end, the state is prepared to take stakes in companies, even partially or fully, if this should become necessary,” she added.

Germany's blue-chip DAX index .GDAXI, which comprises the country's 30 largest listed corporations, has plunged about a quarter over the past month as the coronavirus outbreak has brought several economies to a near standstill.

Economy Minister Peter Altmaier said last week that temporary and limited state support as well as state-funded participations and takeovers may be used to fend off unwanted foreign takeovers.

Investment bankers and M&A lawyers are expecting that cash-rich buyers, some of them state-backed, will try to use the opportunity of buying up companies on the cheap.

As a result, Spain has tightened its rules on investment screening; Germany is in the process of doing so.

“The focus is not so much on past crises, but on what strategic considerations are being made, especially in China, and in the current context possibly also in the U.S.”, Jan Bonhage, a Hengeler Mueller lawyer specializing in public economic law told Reuters.

Media reports that Washington had tried to gain access to a potential coronavirus vaccine being developed by Germany’s CureVac stirred a political backlash in Germany, with economy minister Peter Altmaier and interior minister Horst Seehofer voicing support for keeping CureVac German.

CureVac later denied it had received U.S. offers for the company or its assets.

In November, Germany set out plans to create a government committee to step in quickly to protect companies against foreign takeovers, a sign of concern about China and others acquiring its technology.

The planned Economic Stabilization Fund Act will give an interministerial committee the power to decide on the state taking stakes in companies.

“This includes the energy, water, information technology, telecommunications, finance, health, transport, traffic and food sectors, so there is not much else left to do,” Bonhage said.

Reporting by Arno Schuetze and Paul Carrel; Editing by Michelle Martin and Thomas Escritt

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