The global pandemic is shaking up the EU’s agenda and Europeans are eagerly waiting for the October 2020 deadline to set up the EU’s Foreign Direct Investment (FDI) screening mechanism. Whether the recession that is triggered by the health crisis is severe but temporary or whether it is a shock that brings about structural change in the global economy, the weakening position of European companies will create many opportunities for corporate takeovers at bargain prices. The 2008 crisis has shown that strategic assets must be protected against investments that undermine the strategic autonomy of a member state or the single market, which is built on the physical and digital interconnection of national economies. The aggressive acquisition of a company in one member state can create dependencies in an entire supply chain and therefore affect several member states. Takeovers of European companies by investors from China, Hong Kong and Macao have been sharply increasing (from five thousand to twenty-eight thousand between 2007 and 2017), particularly in countries weakened by the sovereign debt crisis. This has prompted collective European vigilance to protect the single market, especially because state-owned enterprises and investment funds, which are increasingly active in M&A, remain opaque about their governance and the origin of their financing.
Dr. Elvire Fabry is Senior Research Fellow at the Jacques Delors Institute, formally she was the director of the Fondation pour l’Innovation Politique.