UK markets closed
  • FTSE 100

    +29.57 (+0.36%)
  • FTSE 250

    +13.98 (+0.07%)
  • AIM

    +4.64 (+0.59%)

    +0.0024 (+0.21%)

    +0.0075 (+0.58%)
  • Bitcoin GBP

    +1,109.66 (+2.49%)
  • CMC Crypto 200

    +46.53 (+3.88%)
  • S&P 500

    +30.81 (+0.55%)
  • DOW

    +247.15 (+0.62%)

    -0.44 (-0.53%)

    -5.90 (-0.24%)
  • NIKKEI 225

    -1,033.34 (-2.45%)

    +461.05 (+2.59%)
  • DAX

    +213.62 (+1.15%)
  • CAC 40

    +97.19 (+1.27%)

Coronavirus: German government fears hostile takeovers of weakened companies

18 March 2020, Hessen, Frankfurt/Main: Next to the taxiways and taxiways of the airport are several Lufthansa aircraft. The planes have been parked because they are not in use at the moment. Like most other airlines, Lufthansa has drastically reduced the number of flights due to the coronavirus pandemic (picture repetition with better quality) Photo: Vasco Garcia/dpa (Photo by Vasco Garcia/picture alliance via Getty Images)
18 March 2020, Hessen, Frankfurt/Main: Lufthansa planes parked because they are not in use at the moment, due to drastic cuts in flight schedules. Photo: Vasco Garcia/picture alliance via Getty Images

Germany is bracing for many months of economic crisis, as it battles through the coronavirus pandemic.

As Europe’s largest economy prepares to launch a multi-billion-euro rescue package today, government ministers in Berlin are concerned that the crisis will make key companies and industries vulnerable to hostile foreign takeovers.

In a weekend interview with the Süddeutsche Zeitung (link in German) newspaper, the federal transport minister said that weakened German companies could be targeted by international investors — and that the government needs to get laws in place to avert that.

READ MORE: Lufthansa grounds 95% of flights and looks to state aid for survival


"There is worldwide interest in successful German companies, also in mobility and infrastructure," transport minister Andreas Scheuer told the paper. He said he was in discussions with other ministries to draw up countermeasures, noting “it is about securing economic power in Germany after the crisis."

China in particular has shown great interest in cutting-edge German companies, especially in the tech and engineering sectors. Chinese firm Midea’s €4.5 billion takeover of robotics firm Kuka in 2016 provoked major angst in government circles, as did Geely becoming Daimler’s biggest shareholder in 2018.

Olaf Scholz, Germany’s finance minister and vice-chancellor, told Süddeutsche Zeitung that the government is ready to deploy the “great financial strength of our state” to protect companies at this time. It is also possible that the government would take temporary ownership in companies to help ward off foreign investors.

READ MORE: Berlin to earmark €40bn to help self-employed and tiny companies weather coronavirus

Bavarian state premier Markus Söder wants to ban foreign takeovers of German firms if needs be. "If at the end of this crisis... almost the entire Bavarian and German economy is in foreign hands and we no longer have any control options, then it is not just a medical crisis," Söder said.

The IfO Institute said today that the COVID-19 crisis could cost the German economy more than half a trillion euros and more than a million jobs.

"The costs are expected to exceed anything known in Germany from economic crises or natural disasters in recent decades," said Ifo President Clemens Fuest in a statement. The Ifo puts the costs of a two-month partial shutdown of the economy at between €255 bn and €495 bn.

Merkel in quarantine

A Police officer stands guard outside a house where German Chancellor Angela Merkel has an apartment with her husband in Berlin on March 22, 2020 after it was announded by her spokesman that Merkel is going in to quarantine after being treated by a doctor who has since tested positive for the novel coronavirus COVID-19. (Photo by John MACDOUGALL / AFP) (Photo by JOHN MACDOUGALL/AFP via Getty Images)
A police officer stands guard outside the house where German Chancellor Angela Merkel lives in Berlin on March 22, 2020 after it was announced that she is going into quarantine. Photo: John MACDOUGALL /AFP via Getty Images

Angela Merkel’s office announced on Sunday evening (22 March) that the chancellor would go into a two-week home quarantine, after a doctor with whom she had an appointment later tested positive for the coronavirus.

READ MORE: Merkel goes into quarantine as Germany imposes extreme restrictions on public life

The announcement came just after Merkel announced a raft of new measures aimed at slowing the spread of the virus in Germany. All 16 states will now implement a ban on more than two people gathering together at any time, and people should only leave the house for essential chores, and then alone or in groups of two maximum.

Watch the latest videos from Yahoo UK