For the past decade, the European Commission (EC) has been on a mission to wipe out golden shares across the EU. Golden shares are special rights member states retain over certain recently privatized companies. These rights typically give the government the power to veto or prevent changes in the ownership structure of the company.
The EC's last major hurdle to achieving this goal is Germany's VW Law, a golden share that effectively blocks takeovers of Volkswagen. It carries special significance because it's one of the oldest golden shares in existence.
The EC stepped in and filed suit against France, alleging its golden shares restricted cross-border investment. Prior to a 2002 ECJ ruling in the Commission's favor, France voluntarily loosened its grip on Elf-Aquitaine and allowed it to become TotalFinaElf. France has since repealed its golden shares.
At the same time, the EC successfully eliminated other golden shares, including British control of several airports and Spain's control of its banking and tobacco industries. In response, many member states voluntarily scaled back or eliminated their own special rights.
"Obviously the removal of golden shares means that takeover bids may be more likely in the future," says Mark Powell, partner at White & Case in Brussels. "But because they'll retain a very close nexus to the state, these countries could still make life difficult for foreign investors through such measures as legislation."