Increased requirements for German examinations of corporate acquisitions by Chinese investors
Last week the business press reported on difficulties in the planned purchase of German companies by Chinese investors. Pursuant to the reports, the German Federal Ministry for Economic Affairs and Energy revoked the initially granted certificate of non-objection for the acquisition of Aixtron. Moreover, the Ministry apparently also denied to issue a certificate of non-objection for the acquisition of Osram’s lamp division Ledvance.
These decisions raise many interesting and vitally important practical questions. As a result, the requirement for legal certainty and the security of investments, on the one hand, and public order and security concerns, on the other hand, need to be carefully evaluated in each individual case.
In practice, the following should be observed:
- Firstly, parties involved in transactions with Chinese, but also other foreign purchasers should take the German regulations on the cross-sectoral and sector-specific examination of corporate acquisitions even more seriously than before. The Federal Ministry for Economic Affairs’ interest in this kind of transactions as well as its willingness to break new legal ground by revoking a granted certificate of non-objection, shows that the Ministry will in future very carefully examine whether an acquisition affects the Federal Republic of Germany’s strategic interests.
- Secondly, the commonly used SPA contract clauses should be reviewed. It will have to be examined, whether the constellation of a potential revocation of a granted certificate of non-objection needs to be explicitly provided for.