Screening of Foreign Direct Investments Through European Company Law

Abstract

This chapter examines how screening of foreign direct investments could take place through European company law. It scrutinizes the contribution of both CJEU’s case law and the harmonization of European company law to an effective screening of foreign direct investments. On the basis of this approach, this chapter is divided into two parts. The first part focuses on CJEU’s case law, and the second part examines harmonization. An examination of the freedom of establishment of companies in the light of CJEU’s case law on corporate mobility sheds light on the screening of foreign direct investments. The impact of the privatizations of State-owned companies and of CJEU’s golden share case law on the screening of foreign direct investments is discussed. This chapter analyzes how certain harmonizing instruments of European company law could contribute to the screening of foreign direct investments. The relationship between the goals of the harmonization of European company law and the screening of foreign direct investments is also scrutinized. The Takeover Bids Directive with its optionality and reciprocity regime and with its requirements for disclosure of information could contribute to an effective screening of a foreign direct investment behind a takeover bid. Additionally, this chapter examines how the Shareholders Rights Directive II, the Transparency Directive, the Cross-Border Mergers Directive (repealed and consolidated into Directive 2017/1132) and the European Company Statute (Societas Europaea – SE) could contribute to investment screening. Some concluding remarks are deduced on the importance and effectiveness of European company law for the screening of foreign direct investments.