Germany follows through with tighter controls on foreign direct investment
19 December 2018
Earlier this year, the planned acquisition of the German company Leifeld Metal Spinning, a manufacturer of mechanical engineering products, by Yantai Taihai, a private undertaking based in China, was the first ever deal to be formally authorised for prohibition by the German government. Flowing from the ensuing discussions and continuing concerns, the latter resulting also from other cases in particular from the energy sector, the German Federal Ministry for Economic Affairs and Energy adopted amendments to the Foreign Trade and Payments Ordinance mainly subjecting even more deals to its review. The amendments are expected to come into force at the beginning of 2019.
Key issues
- Policy shift towards greater scrutiny of FDIs to continue
- Threshold for review lowered from 25% down to 10% for operation of critical infrastructure and defence-related investigation
- Expansion of the scope of application of AWV to media undertakings