US Investors Stealthily Acquire European Businesses Through Capital Investment
In an increasingly globalised economy, the European Commission has identified "strategic autonomy" as a top industrial policy priority. However, the question remains: what concrete measures are being proposed to prevent the "shopping spree" of European businesses?
One potential solution is the implementation of employee and steward ownership models, which are gaining traction across Europe. These models aim to transfer majority ownership to employees, ensuring economic sovereignty against increasing foreign investments, particularly from the United States.
In the United Kingdom, a notable example is David Spear Commercials (Wales), which plans to transfer 60% majority ownership to employees through an Employee Ownership Trust (EOT) in 2025. This move is designed to protect the company's independence, preserve its culture, and provide long-term financial participation and leadership opportunities for employees, while securing local roots. EOTs typically involve trustees who act in the best interests of all employees and often include employee representatives or councils in strategic decision-making, empowering workers in governance.
The European Commission is also exploring legal frameworks, known as the "28th regime", that could support alternative company ownership models such as cooperatives, social enterprises, and partnerships. This includes creating a harmonised business code across member states to enhance competitiveness while preserving European values like social inclusion and democracy.
Employee Share Ownership Plans (ESOPs) are another tool being utilised by large European companies to increase employees' capital participation, contributing to business stability and protecting against external control. For instance, FDJ UNITED has successfully implemented an ESOP.
Organizations such as the Aspen Institute are fostering conversations on employee ownership’s benefits in sectors like healthcare, emphasizing how such models can strengthen local performance, improve jobs, and retain independence in critical industries.
These efforts collectively support protecting economic sovereignty by embedding ownership and control within employees and local stakeholders. They are seen as tools not only for preserving local business culture and democratic governance but also for promoting long-term sustainable success aligned with European social and economic values.
The trend towards employee and steward ownership models is not limited to Europe. In Canada, recent legislation has been passed to prevent foreign takeovers and insulate businesses from external shocks. In Germany, 626,000 businesses are planning a business transfer in the next two years.
As the window of opportunity for effective defence against financial expansionism narrows, the need for special legislation to provide regulatory certainty for sellers and sustainable models that anchor ownership securely becomes more urgent. A robust financial infrastructure with a range of financing instruments is essential to support leveraged buyouts and decrease risk for private lenders.
The total value of US-held European business assets has surged from $1.05 trillion in 2011 to $3.79 trillion in 2024. With more than 10,000 businesses in the US and UK anchored in local communities, and nearly 32 percent of European assets currently held by American investors, the stakes are high.
Localized businesses tend to outperform conventional competitors, and Small and Medium-sized Enterprises (SMEs) are responsible for 71 percent of employment growth in the non-financial economy. However, a third of European businesses are threatened by a lack of succession options, leaving billions of euros worth of European capital vulnerable to takeover.
In conclusion, the shift towards employee and steward ownership models is a significant development in Europe's industrial landscape. By anchoring ownership in the hands of those who contribute to their success, these models offer a means to protect economic sovereignty and promote long-term sustainable success aligned with European social and economic values.
Investing in employee and steward ownership models, like the Employee Ownership Trust (EOT), could be a strategic approach for European businesses, as these models aim to transfer majority ownership to employees, thereby securing economic sovereignty against increasing foreign investments. Moreover, fostering the growth of alternative company ownership models, such as cooperatives and social enterprises, could strengthen European businesses, promoting long-term sustainable success while preserving democratic governance and European values.
