On July 12, 2017, Germany tightened its control over acquisitions of domestic companies by foreign investors by introducing amendments to the Foreign Trade and Payments Ordinance (the Ordinance). As a result the German Federal Ministry for Economic Affairs and Energy (the Ministry) can now block certain acquisitions more easily based on security reasons.
The change in the law was the result of the German federal government’s reaction to the security concerns raised by the latest trend of foreign investments into domestic companies. During the previous year, there was an increase in acquisitions of German companies by Chinese investors. Examples include the multi-billion acquisitions of Energy from Waste (EEW) by Beijing Enterprises and of Kuka by the Chinese Media Group. Both acquisitions alarmed the public, and the Ministry was criticized for not blocking these investments. The main concern was that foreign investors were able to get access to German know-how in strategically important sectors.
