German Investment

A Promised Land

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IBM's headquarters in Munich. IBM is not the only company looking to invest in Germany.
  • Why it matters

    Why it matters

    A recent series of foreign takeovers of German industrial firms underscores that Europe’s largest economy is one of the world’s most attractive locations for international investors.

  • Facts

    Facts

    • Foreign firms invested in a record 946 projects in Germany, according to research by consultancy EY. Only Britain attracted more.
    • 69 percent of corporate managers cited Germany as one of the three most attractive locations in Europe, according to an EY survey.
    • Germany’s high taxes and rigid labor laws are seen as impediments to foreign investment.
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    Audio

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Germany is the go-to country for foreign investors who want to gain access to the European market. That has been underscored not only by some high-profile industrial takeovers this year, but by new figures from consultancy EY, obtained by Handelsblatt.

The research showed foreign companies invested in 946 projects in Germany last year, 9 percent more than in 2014, itself a record year. They created 17,000 new jobs in the process.

The mega-deals have been streaming in of late, led in particular by China. A group led by state-owned China National Chemical Corp bought German industrial machinery maker KraussMaffei. Then Shanghai Electric agreed to buy at least a quarter of German technology group Manz in a deal that could lead to a full takeover.

Last week, China’s home appliance maker Midea bid for factory robot maker Kuka. On Monday, Fujian Grand Chip Investment Fund unveiled an offer for Aixtron, a German semiconductor equipment maker.

The list goes on. Demag Cranes, a highly profitable maker of cranes that was bought by U.S. rival Terex five years ago, is now being sold to Finnish competitor Konecranes. And on Tuesday it was announced that French company SEB would acquire German kitchenware maker WMF.

But the interest isn’t confined to corporate acquisitions. Firms are also investing billions of euros in German locations.

IBM, for example, has located its new Watson supercomputer in Munich, where 1,000 developers, programmers and designers are working on the Internet of Things. The U.S. giant plans to invest €2.75 billion, or $3.08 billion, in the site, its biggest European investment in two decades.

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