Sweden’s Government Steps Up Efforts to Vet Foreign Takeovers

Sweden is stepping up efforts to shield its critical businesses from foreign takeovers at a time of economic weakness due to the Covid-19 pandemic.

Interior Minister Mikael Damberg and Foreign Trade Minister Anna Hallberg on Monday unveiled a series of proposals. They include asking the Swedish Defense Research Agency to map out areas where foreign direct investments may have a negative impact on national security, and giving the Inspectorate of Strategic Products the authority to collect information on a foreign investor that has shown interest in a Swedish company, “if the direct investment risks having an effect on security and public order within the EU,” Damberg said at a press conference.

“These are important pieces of the puzzle in the works to give Swedish authorities the prerequisites to work against foreign direct investments that may put our national security at risk,” Damberg said.

The issue has become more urgent following events in neighboring Norway, where the creditors of Norwegian Air Shuttle AS recently took over the airline, resulting in a Chinese state-owned company becoming its largest stakeholder. Scandinavia’s main carrier SAS, which is partly owned by the Swedish and Danish states, is currently discussing recapitalization plans amid a breakdown in global air travel.

Last week, a parliamentary committee asked the Swedish government to swiftly look into the matter and implement measures that would make it possible to scrutinize foreign takeovers.

The move is in line with developments in other European Union countries amid concerns that they risk losing control of sensitive technology and infrastructure. In Germany, Chancellor Angela Merkel’s cabinet has enacted measures that enable the government to block acquisitions from non-EU companies that present “potential interference.”