As the corona pandemic continues to take a severe human and economic toll on nations worldwide, the EU is increasingly worried that it will leave firms vulnerable to hostile takeover bids from foreign investors.
The massive public health crisis unleashed by the novel coronavirus worldwide has sent markets across the world spiraling. While the market meltdown is bad news for shareholders, it presents a chance for opportunistic investors and corporate raiders to buy stocks at attractive prices.
Authorities in Europe are becoming increasingly worried about foreign investors launching hostile takeover bids to acquire companies in strategic sectors. “Low stock prices represent an opportunity for corporate mergers and restructuring,” Guntram Wolff, director of the Brussels-based economic think tank Bruegel, told DW.
“Such restructuring can be welcome if it helps the system to cope with the shock. At the same time, the European Commission and EU member states are aware that in such a situation, strategic assets need to be protected,” he added.
“The corona crisis looks set to amplify state-owned economic actors’ penchant for strategically investing in critical and future sectors of European economies,” Jonathan Hackenbroich, a policy fellow for economic statecraft at the European Council on Foreign Relations (ECFR), told DW.
“Now that everyone is vying for outside money, companies could get bought up and know-how and capacity in critical future sectors transferred out of Europe, to China or the US or other countries,” he said.
The expert pointed to recent reports suggesting a US bid to acquire German-based company CureVac, which is working on a vaccine for the novel coronavirus. Although the company later denied that a formal offer was made, Hackenbroich said the episode shows the need for Europeans to put in place effective arrangements to thwart such foreign attempts to take over strategic sectors of the European economy.