BRUSSELS -- The European Union will start reviewing proposed acquisitions of companies in its 28 member nations by outside investors as early as fall 2020, seeking to safeguard important technology amid growing concern about China's ambitions.
The measure approved by EU ministers on Tuesday creates a bloc-level screening process for foreign direct investment, a matter now handled on a country-by-country basis. The framework was proposed by the European Commission, the EU's executive arm, in September 2017.
The new framework will cover investments into companies in strategically significant fields such as robotics, artificial intelligence, energy and infrastructure. The commission will examine proposals and issue opinions. But the relevant countries will have the final say over whether to approve or reject deals.
The change comes in response to increasing Chinese acquisitions of European businesses, a trend that some in the EU -- especially Germany and France -- worry could put their technology at risk. Of particular concern was Chinese appliance company Midea Group's 2016 takeover of German robot maker Kuka, which played a leading role in Berlin's Industrie 4.0 initiative to transform the country's manufacturing industry.
Germany tightened oversight in December of investments into domestic companies from outside the EU in areas such as infrastructure and defense, requiring notification and government approval for deals involving at least 10% of voting rights, down from 25%.
Though more than 10 of the 28 EU members -- including Germany, the U.K., France, Italy and Spain, the bloc's largest economies -- have screening processes for foreign investment, the rest have no formal review mechanisms. Under the new EU-wide framework, member countries will be asked to share information on acquisitions with the commission in annual reports.