Berlin is preparing for the first time to veto the takeover of a German company by Chinese investors for "strategic" reasons, local media reported today, a year after ministers toughened up rules over fears the country could lose vital technologies.
Business weekly Wirtschaftswoche reported the economy ministry will prevent Chinese investor Yantai Taihai Corporation from buying Leifeld Metal Spinning.
The 200-employee firm produces high-strength parts for the car and aerospace industries that also have nuclear applications.
"The cabinet will make the decision on August 1," the magazine said.
A spokesman for the ministry declined to comment on the specific case when contacted by AFP.
But he said that "the economy ministry can examine whether a purchase endangers public order or the security of the Federal Republic of Germany."
The government can take a closer look if a foreign investor plans to buy at least 25 per cent of a firm and last year modified rules to extend the range of firms eligible for a probe under "critical infrastructure" provisions or considered to be developing "key technologies".
Ministers also doubled the amount of time civil servants have to examine deals by non-European Union or European Free Trade Association (EFTA) buyers from two to four months.
The moves followed a string of high-profile takeovers or attempted takeovers of high-tech German firms by foreign companies.
Robot maker Kuka was bought by China's Midea in 2016, while factory automation specialist Grohmann Engineering was snapped up by US-based Tesla Motors.
A study by consultancy EY found Chinese companies bought 54 German firms last year and invested USD 13.7 billion in Europe's largest economy.
In March, then-economy minister Brigitte Zypries said continuing approaches from China might encourage Berlin to lower the ownership threshold that could trigger a government probe of a foreign investment.
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