On October 26, 2022, the German government permitted (with conditions) an investment by Chinese state-owned COSCO Shipping Group (“COSCO”) in one of Hamburg’s four shipping container terminals. Pursuant to foreign direct investment (“FDI”) laws, the German Ministry for Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und Klimaschutz, “BMWK”) had been notified of the proposed acquisition by COSCO of a 35% minority interest in the port terminal, a strategic location on the German coastline. The BMWK ordered that COSCO’s acquisition of voting rights must remain below 25%. The details of the decision remain confidential, but the BMWK justified its partial prohibition on the grounds that the acquisition of 35% as notified would constitute a “threat to public order and security”. According to the BMWK’s press release, the partial prohibition decision prevents COSCO from acquiring a ‘strategic’ shareholding, and reduces the acquisition to a mere financial participation. As a safeguard in this respect, the decision contains provisions prohibiting COSCO from acquiring any additional influence, for example, through a grant of rights that would be atypical for a holder of a less than 25% interest. Furthermore, under the German FDI regime, any follow-on acquisition of additional voting rights by COSCO would be subject to a new notification requirement.
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