1. Impact of the Geopolitical Situation on Foreign Investment Control and Notification Obligations in Germany
Germany and the European Union have always been open to investment by foreign companies in domestic markets. There is broad consensus among the German Government1, the Federal Ministry for Economic Affairs and Climate Action (BMWK)2, which is responsible for the review of foreign investments in Germany, and the European Commission3 that foreign direct investments are indispensable for economic growth, competitiveness, employment and innovation. The Federal Republic of Germany’s liberal attitude towards foreign investments has continued to this day. State intervention remains the exception.
At the same time, foreign investment control is a mirror of the global foreign and security policy situation. The increase in protectionism worldwide in recent years, the Covid-19 pandemic, the Russia-Ukraine war, and the tense financial markets have left their traces. The German Government is increasingly reviewing certain investment projects with skepticism, especially when investors are based in less liberal states such as the People’s Republic of China,4 and/or investments are planned in domestic markets or infrastructure that are particularly relevant to the public good.5
Against this background, the scope of application and the framework conditions of German foreign investment control have been tightened several times in recent years. One focus of the reforms has been – among other things – the instrument of the notification obligation. An acquirer is obliged to notify certain foreign investments to BMWK immediately after signing of the acquisition agreement and may only complete the acquisition after the BMWK has given its approval (statutory closing condition). Such a notification obligation had already existed since 2002 for foreign direct investments in the armaments and defense sector (so-called sector-specific investment review). In recent times, it has also been introduced and then significantly extended for other sectors, i.e. within the scope of the so-called cross-sectoral investment review.
2. Overview of Notification Obligations in the German Health Sector
As a result of recent reforms, many foreign direct investments in the German health sector are now subject to mandatory notification and statutory closing conditions.6 In the following, we provide an overview of the main product and service markets that are affected by this, whereas notification obligations equally apply to share deals (above certain thresholds) and asset deals: