BRUSSELS (Reuters) – European Union leaders will on Thursday back plans to defend healthcare, infrastructure and other firms seen as having strategic role from hostile foreign takeovers, draft EU summit conclusions show.
FILE PHOTO: A general view of the Canary Wharf financial district in London, Britain October 24, 2017. REUTERS/Kevin Coombs
Listed companies worldwide have become easier targets as share prices have crashed during the coronavirus crisis, with vaccine makers and other firms that have emerged as crucial players in the fight against the virus attracting attention.
Leaders of the 27 EU states in a videoconference starting from 4 p.m. (1500 GMT) will agree to take “all necessary measures to protect strategic assets and technology from foreign investments that could threaten legitimate public policy objectives,” according to draft conclusions of the call.
The European Commission, the EU executive arm, issued guidelines on Wednesday to boost national defenses against takeovers.
“As in any crisis, when our industrial and corporate assets can be under stress, we need to protect our security and economic sovereignty,” Commission head Ursula von der Leyen said.
Among the firms that should enjoy special safeguards are those active in health, biotechnology, medical research and “infrastructures that are essential for our security and public order,” the commission said.
Brussels promised 80 million euros ($88 million) last week to Germany-based CureVac, a biotech firm which the EU executive said had developed new technology that could slash costs for vaccines and provide a rapid response to COVID-19, the disease caused by the novel coronavirus.
The move followed reports that the U.S. administration was looking into how it could gain access to the potential vaccine being developed by CureVac.
Under EU rules, states can already block takeovers in strategic sectors or impose supply commitments to meet national and EU vital needs. The guidelines are meant to make sure all available protective tools are used.
EU leaders will support Brussels’ guidance, which chimes with a push last year from France and Germany to relax EU competition rules and facilitate mergers of EU companies in a bid to boost their size and defenses against foreign raiders.
“This will contribute to the EU’s strategic autonomy, during the crisis and afterwards,” leaders will say, according to the draft text, in a new sign the virus emergency may have lasting effects on how the bloc functions and its global relations.
Countries are already raising their defenses. Italian Economy Minister Roberto Gualtieri said on Tuesday a national shield could cover industries deemed of strategic interest in the case of epidemic, seismic, information technology or geopolitical risks.
France has openly called for repatriating production lines that rely on global supply chains disrupted during the epidemic, which erupted in China, the world’s largest manufacturer.
In a bid to reduce disruptions to supplies, EU leaders will pledge to do their utmost to strengthen the sustainability of global value chains and “to adapt them as necessary.”
Reporting by Francesco Guarascio; Editing by Edmund Blair