EU proposes new rules to tackle takeovers from state-backed firms like those in China as concerns grow over unfair competition.
The European Commission, the executive arm of the EU, proposed Wednesday to have a bigger say when foreign state-backed firms buy stakes in European companies to a point where it could prohibit the merger — if its deemed that it could create market distortions.
The proposal kicks off a discussion period that lasts until September, but it comes after Germany and France pushed for changes at the top level. In a letter sent to the EU in February, both governments said it should revise its guidelines regarding mergers, as European firms were increasingly fighting against players that received “substantial state support.”
State influence has often been discussed in the EU, but the ongoing pandemic has made the issue even more pressing as many businesses are struggling for cash.
