SWEDEN plans to tighten its rules to enable the government to block takeovers of important firms by foreign companies amid increasing concerns over the threat to national security.

The outbreak of the novel coronavirus has heightened fears that hard-hit Swedish companies could be easy prey to foreign investors looking to gain access to cutting-edge technology or firms linked to crucial infrastructure.

“Sweden will continue to be a country that is very attractive for foreign investors,” Home Affairs Minister Mikael Damberg said. “But there are areas where we see a need to protect businesses in Sweden.”

He said the government hoped to put forward a bill to give it greater powers to stop takeovers after the summer.

While Damberg said the tighter rules were not aimed at any specific country.

The Swedish move follows an announcement by Japan earlier Friday of a list of its companies subject to tighter foreign ownership rules, as Europe and the United States intensify scrutiny of industries key to national security.

Chinese firms have bought or invested in 65 Swedish companies since 2002, according to a report at the end of last year by the Swedish Defence Research Agency (FOI), including multi-billion dollar deals such as Zhejiang Geely’s acquisition of Volvo Cars and purchase of a stake in truckmaker AB Volvo.

The FOI report said China’s targets included biotechnology firms, the semi-conductor sector, lasers and space, and was closely related to the state’s industrial development strategy.

With shares in some companies in these sectors at knock-down prices, foreign investors could swoop, Wallmark said.

“There is a risk they could be a target for certain countries,” Wallmark said. (SD-Agencies)