Berlin.
The number of takeovers of German companies by Chinese investors has fallen. According to one study, it’s the calm before the storm.
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IMST GmbH is a classic medium-sized company. 145 employees, sales before the corona pandemic of almost 14 million euros, the company headquarters in Kamp-Lintfort on the Lower Rhine, not far from Duisburg. The “Institute for Mobile and Satellite Radio Technology”, which was founded in 1992 as a spin-off from the University of Duisburg-Essen and forms the company name IMST, is on research and Development of radio systems specialized.
Such systems come in at Satellites for use, but also with the 5G mobile radio standard or autonomous driving. The user himself does not notice much of this, which is why the IMST is quite unknown nationwide.
But at the end of last year, the IMST was suddenly in the limelight and became a political issue. Because the company should sold to china – to the company Addsino, which is mainly active in the armaments sector.
The federal government is taking a tough course on China
The Federal Ministry of Economics thwarted the plans. It prohibited the takeover because the ISMT was of relevance to security. The federal cabinet approved the decision.
Federal government feared a German sell-out
It was an extraordinary decision. And it shows the industrial policy direction that Federal Minister of Economics Peter Altmaier (CDU) took over: Takeovers of German companies from China are undesirable.
When the Corona crisis hit Germany, Altmaier feared the takeover of German companies that are mainly active in the health sector. No wonder, the share prices of listed companies were low, many companies would have been available at a bargain price.
The government acted quickly. The Foreign Trade and Payments Ordinance (AWV) has been revised, making acquisitions from non-EU countries much more difficult.
In 2020, 23 companies were bought by Chinese investors
With the results you want. Only 23 German companies were taken over by Chinese companies last year, and the former sell-off of German companies seems to have stopped. That is the result of a study by Institute of the German Economy from Cologne (IW)which is available to our editorial team.
As recently as 2016, there were 44 takeovers or investments by Chinese investors, and the number has been falling continuously since then. And yet: High-tech companies in particular have repeatedly been targeted by Chinese investors.
Tom Tailor was sold for one euro
The best-known takeover last year was that of the Hamburg company Tom Tailor. The Chinese investor Fosun bought the fashion retailer, which had already run into trouble before the corona pandemic, for the symbolic value of one euro.
Also the East Westphalian luxury kitchen manufacturer Poggenpohl went to Chinese investors last year. After the traditional company from Herford had to file for bankruptcy in the wake of the pandemic, the Chinese kitchen fittings manufacturer Jomoo bought the company.
Ban on trade with China
Fashion and kitchens – such takeovers are also unproblematic from the perspective of the federal government. The situation is completely different in the areas of security and industry. Not only IMST came into the focus of the federal government.
The Upper Bavarian aerospace company Mynaric manufactures so-called laser communication terminals that enable communication with satellites. In July, the federal government issued an order to Mynaric AG to cease its activities in China.
Federal government is tightening the reins
Also in Health sector the federal government has been watching closely since the outbreak of the corona crisis. After all, at the beginning of the pandemic, it was found that in the event of an emergency, medical technology companies are rare in this country anyway.
Accordingly, the grand coalition tightened the so-called foreign trade regulation and added the health sector to the list of special security-related companies on. If companies from non-EU countries want to invest in German companies on a larger scale, the Federal Ministry of Economics must first approve an acquisition.
Three companies in the health sector were bought
The measure did not fail to have its effect. Only three companies from the health sector were taken over in 2020, according to IW. The takeover of Heyer Medical AG Bad Ems, which manufactures ventilators among other things, had already been scheduled in the course of a restructuring since 2018, last year the Chinese Aeonmed Group took over.
In Leverkusen The Chinese company WuXi Biologics also acquired a cGMP production facility. According to the IW study, Biotecon Diagnostics in Potsdam, which produces PCR tests among other things, was also taken over by Chinese investors.
Federal government wants to make takeovers even more difficult
Of the Protection of German companies The Federal Government is apparently not going far enough. The grand coalition followed suit in autumn and gave the Federal Ministry of Economics further powers to prohibit takeovers. For a few weeks there have been further specific tightening plans.
A whole series of sectors should in future only be able to be taken over with the consent of the Federal Ministry of Economics. These include companies that are involved in the development and sale of products artificial intelligence, automated driving and flying, and semiconductors. Aviation companies or companies that specialize in server security, 3D printing or industrial robots should also be included. Germany isolates itself.
IW Köln expects more takeovers in the future
Because the real one attack from Chinese investors is still to come, according to the IW study. “The People’s Republic’s increasing economic importance in the world economy will also favor the expansion of Chinese companies into Germany,” writes IW industrial economist and study author Christian Rusche.
Also the Federation of German Industry (BDI) attributed the decline in Chinese investments to the global economic downturn. “In the past year, FDI has fallen by a total of 42 percent worldwide,” said BDI President Siegfried Russwurm our editorial team.
BDI President urges market economy and openness
The new form of the bothers him protectionism, which the Federal Ministry of Economics is working on. “Instead of a sweeping attack, it makes sense to limit state interventions to security policy and narrowly defined national interests,” said Russwurm.
Foreign investors would need the same Legal certainty in the case of investment projects that German industry would like to see abroad, the BDI President warned.
In doing so, however, he also sees China has a duty, which also contributes to investment uncertainty. “The German industry misses clear signals for more openness and a market economy. They would be central pillars for stronger cooperation between China and Europe, ”said Russwurm.
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