Germany Shields Local Firm From Foreign Takeover, Buy-Ins

Berlin, Germany (AHN) - The German government approved a new regulation on Wednesday that restricts foreign takeover of German firms. The new rule, however, needs the final approval of the Bundestag.

The measure seeks to protect key German telecommunications, banking and energy industries from buy-ins by companies with funding from foreign governments like Russia, Middle East countries and China.

The proposed law covers attempts by non-European Union-controlled investment firms to buy more than 25 percent stakes in German firms or companies in certain industries. It was patterned after a similar U.S. law.

Economy Minister Michael Glos commented, "The majority of foreign investments won't be affected by the draft law... Germany is and remains open to foreign investments."

A German International Chamber of Commerce spokesman was alarmed at the possible negative effect such a law might have on foreign investment. The Federation of German Industry (FGI) warned the measure sends the wrong signal to foreign firms.

"As the world's leading export nation and a key source of foreign investment, Germany is heavily dependent on open markets," said Werner Schnappauf, FGI head.