EU wants tougher checks on subsidised foreign buying spree of EU firms

The European Commission announced plans on Wednesday to impose tougher checks on foreign companies benefiting from unfair subsidies to buy up EU firms, a move targeted at Chinese state-owned enterprises and other foreign bidders. Companies already present in the 27-country bloc could be forced to report foreign subsidies to the Commission if these exceed more than 200,000 euros, the draft said.

The European Commission announced plans on Wednesday to impose tougher checks on foreign companies benefiting from unfair subsidies to buy up EU firms, a move targeted at Chinese state-owned enterprises and other foreign bidders. "There is a growing number of instances in which foreign subsidies seem to have facilitated the acquisition of EU companies or distorted the investment decisions, market operations or pricing policies of their beneficiaries, or distorted bidding in public procurement, to the detriment of non-subsidized companies," the EU executive said.

Foreign companies seeking to buy a stake of more than 35% in EU firms that have a turnover of more than 100 million euros ($112.3 million) will have to inform the Commission if they have received more than 10 million euros in state aid, according to a Commission draft seen by Reuters. Companies already present in the 27-country bloc could be forced to report foreign subsidies to the Commission if these exceed more than 200,000 euros, the draft said. ($1 = 0.8903 euros)