Thursday March 26, 2020
As a result of the price slump on the stock markets, billions of stock market values have vanished into thin air – in Germany, the downward trend was particularly strong. The leading index Dax, in which the 30 largest listed companies in the country are listed, has plummeted around 40 percent in the past four weeks. This also means that investors can now get cheaply with German companies – and even try to take over the majority.
“German companies have been punished disproportionately in the past few weeks,” says Thomas Meier, fund manager at Main First, in an interview with ntv. “This means that very potent investors can get excellent companies and good companies very cheaply.” For example, some private investment companies are currently well capitalized. Sovereign wealth funds or foreign state-owned companies would also have sufficient liquidity to buy in – for example from China or the Middle East.
Small and medium-sized businesses are particularly popular. There, many companies are well positioned in key technologies – for example in tool and machine construction or in automation. But not only German companies are targeted, but companies throughout Western Europe. The EU Commission therefore wants to better protect European companies from takeovers. Many are “temporarily weakened by the virus crisis,” said Commission President Ursula von der Leyen. “That’s why we need to know which investors outside Europe want to buy companies in need and for what purpose.” The EU must protect its important technologies and companies. The Commission has therefore issued guidelines for the Member States to “examine foreign direct investment,” said von der Leyen.
Protection against “unpleasant surprises”
The Commission President asked the EU countries to quickly adopt appropriate protective instruments for companies if they did not yet have such regulations. Member States could restrict capital movements if non-European investments could undermine security and public order in the EU. The Commission President also emphasized that the EU was and remains open to foreign investors. “With the guideline, we want to reconcile both the openness and the necessary protection.” The Commission did not initially publish any further details on the guidelines.
Against this background, Federal Economics Minister Peter Altmaier also considers nationalization of companies to be possible, but calls this the “very last resort”. Such takeovers are conceivable, for example, if German interests are “critically endangered”, said the CDU politician. Altmeier said on ZDF that some international speculators may be looking to make a “cheap bargain” in Germany; in such cases the government will act, according to the minister. This will announce it “not very publicly”, Altmaier continued.
Federal Finance Minister Olaf Scholz shares this concern about unwanted takeovers. The SPD politician told the “SZ” that the aid package launched by the federal government should “protect companies against unpleasant surprises, too.”