EU competition chief warns pandemic has made firms vulnerable to foreign takeovers.
European countries should buy stakes in companies to counter the threat of Chinese takeovers, the Commission has said, part of the EU’s attempts to protect its businesses amid the coronavirus outbreak.
It has been long feared by some that certain companies maybe targeted by Chinese rivals, but the sharp economic downturn caused by the recent outbreak and steep falls in share prices across the continent have increased the vulnerability of businesses for potential foreign bids.
Margrethe Vestager, European Competition Commissioner, told the Financial Times: “We don’t have any issues of states acting as market participants if need be — if they provide shares in a company, if they want to prevent a takeover of this kind.
“It’s very important that one is aware that there is a real risk that businesses that are vulnerable can be the object of a takeover,” Vestager said.
“The situation now really underlines the need so we work really intensively. This is one of our main priorities.”
Possible changes were being considered before the coronavirus outbreak and while there is unlikely to be immediate action, Vestager did say she wanted regulations that acted as a deterrent and that these should be drawn up “as quickly as possible”.
The changes would target corporations owned or backed by non-EU governments, to address mainly French and German concerns, that their financial power grants them an unfair advantage over European competitors.
Any proposal would have to go out to consultation and eventually be ratified by the European Parliament.
This is only one proposals in a series of measures being taken by the European Commission to help the continent’s companies.
The EU has announced relaxing state aid laws, allowing countries to help bailout or even nationalise certain businesses which may face closure given the recent, sharp economic downturn.