Italy, France, and Germany have petitioned the European Commission to allow member states to veto takeovers of European companies, La Stampa reported on Tuesday.
The European Commission would be asked to review takeovers to determine whether a takeover is underpinned by an economic or political rationale. That would seem to signal the ability to veto takeovers from state owned corporations, especially if there is evidence to suggest shareholders are offered excessive premiums to sell.
The Italian paper cites a leaked letter to the European Commission. The 10-page document suggests that Berlin, Rome, and Paris fear that Chinese state-owned companies will take over European companies to achieve technology transfers and increase market share.
Another concern is the lack of reciprocity, especially in China, where European companies have limited market access.
The letter is dated July 28 but follows up on a string of previous correspondence that kicked off in February 2017 and reported at the time by Reuters.
The three countries also recommend that member states report every six months the takeovers of national companies from third-country corporations based outside the EU, except those in the defense sector, where member states effectively already have a veto.
The concern over Chinese takeovers appears to be justified. According to an Ernst & Young report, 164 Chinese companies took over European enterprises during the first half of 2016, compared to 183 Chinese takeovers in the whole of 2015. One of the most high profile takeovers that has recently raised concerns is China’s Mideaa take over of the German robot manufacturer, KUKA.