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VW may lose its immunity from hostile takeover.

The European Commission defied Germany yesterday by starting legal action against a law that shields Europe's largest carmarker, Volkswagen, from a hostile takeover.

The move risks a clash with German Chancellor Gerhard Schroeder, who has defended the VW law which could give the state of Lower Saxony, where Mr Schroeder used to be prime minister, a blocking minority by capping shareholder voting rights at 20 per cent.

'The Commission is concerned that certain provisions of that law could act as a disincentive on investment from other member states in violation of EC treaty rules on the free movement of capital and the right of establishment,' the Commission said.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Mar 20, 2003
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