Germany has decided to veto hostile foreign takeover bids for healthcare companies.
The measure, adopted during a cabinet meeting, aims to safeguard a continuous supply of vital medical products during the coronavirus pandemic.
“The current corona crisis shows how important medical know-how and production capacities in Germany and Europe can be in crisis situations,” Economy Minister Peter Altmaier said. “At the same time, the amendment makes an important contribution to the long-term maintenance of a functioning health care system in Germany.”
Under the regulation, the government can block investors from outside the European Union from buying up German firms that are manufacturing vaccines, protective equipment, ventilators, medicines or other supplies.
Healthcare companies will have to notify Berlin as soon as a foreign buyer owns a stake of more than 10%. The government can then assess any security concerns raised by the bid and decide whether to intervene. The threshold until now for reporting has been 25%.
The measure comes after the early stages of the coronavirus saw a worldwide run on materials believed crucial to combat COVID-19 – the respiratory disease caused by the new virus – including reported attempts by the United States government to buy Curevac, a pharmaceuticals start-up that was working to develop a vaccine against the disease.
In future,the government will be allowed to examine the security implications of a bid from outside the European Union as soon as the buyer holds more than 10% of the healthcare company’s shares.Now,the threshold is 25%.
Media reports that the United States tried to gain access to unlisted CureVac or the vaccine it was working on prompted German cabinet members to voice support for keeping the biotech firm German. CureVac has denied having received U.S offers.
The boss of Germany’s BioNTech, also a contestant in the race to find a vaccine, told a newspaper in April that a takeover was out of the question and that the company had received unspecified approaches.
The move echoes earlier moves by Berlin to protect the high-tech companies that have made its economy an exporting powerhouse from takeover bids by ambitious, fast-growing Chinese rivals.