Exclusive-EU nod expected for restrictions on takeovers by state-backed foreign firms
2022.06.30 20:51
FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium June 17, 2022. REUTERS/Yves Herman/File Photo
By Foo Yun Chee
BRUSSELS (Reuters) – Proposed rules to put a brake on state-backed foreign firms acquiring European Union companies with annual turnover of 500 million euros ($520 million) or more are likely to win the backing EU states and lawmakers, a source said on Thursday.
The European Commission presented its proposals for the new takeover rules last year in a bid to stave off what it deems unfair competition from countries such as China, underlining A more protectionist approach by the 27-member bloc.
The source familiar with the matter said EU countries and the bloc’s lawmakers were likely to support the proposals that aimed to restrict takeovers by subsidised foreign firms.
They were also expected to agree on the EU executive’s proposal to prevent foreign subsidised companies from taking part in public tenders above 250 million euros, the source said.
Acquisition or contract bids made by subsidised foreign firms above those thresholds would trigger an investigation.
EU states and lawmakers kicked off negotiations on the Commission’s plan at 1300 GMT in Brussels. The proposals could be adjusted before a final text is agreed.
EU countries had originally pushed for a higher turnover limit for acquisitions and public tender participation, while EU lawmakers wanted to set lower figures to encourage more deals.
Under the rules, the Commission was likely to be offered time during any investigation to determine whether the subsidies received by a foreign firm would have a positive impact for the EU, the source added.
The Commission was also likely to be granted the power to investigate subsidies granted in the seven years prior to the date of any takeover application, rather than the 10 years it had requested, the source said.
($1 = 0.9614 euros)
