The economic fallout from the coronavirus pandemic has significantly reduced global market valuations, rendering many previously robust European companies vulnerable to acquisition. Industries such as airlines, banking, hospitality, and even sports clubs are now facing potential foreign takeovers, raising concerns across Europe.
Margrethe Vestager, the EU competition chief and executive vice president of the European Commission, has suggested proactive measures to safeguard these firms. In an interview with the Financial Times, Vestager recommended that European governments consider purchasing stakes in key companies to protect them from unsolicited foreign acquisitions. “The situation now really underlines the need so we work really intensively,” she stated. “This is one of our main priorities.”
Vestager emphasized that while immediate action is essential, any measures taken should be carefully calibrated. She noted that regulatory frameworks could serve as effective deterrents against unwelcome takeovers and mentioned that Brussels is actively working on proposals to strengthen these protections.
Meanwhile, the EU has announced plans to further relax state aid regulations, permitting member states to assist companies in recapitalization efforts when deemed “necessary and appropriate.” This adjustment allows governments to purchase existing shares of companies at market prices, offering a lifeline to businesses in need and helping to maintain stability in the single market.
“We will make sure that taxpayers are sufficiently remunerated for their investment, and companies that receive capital support are subject to controls and governance provisions that limit possible distortions to competition in the single market,” Vestager stated in an official communication.
Reference(s):
EU advises states to buy into firms to stave off Chinese takeovers
cgtn.com
