Industrial robots made by Augsburg-based manufacturer KUKA: The long-established German company has been wholly owned by Chinese conglomerate Midea since 2022.
Germany's economy is struggling to regain momentum, yet its companies are attracting unprecedented interest from international investors. The value of cross-border takeovers has risen by 134 percent within a year, with American buyers particularly interested in industrial technology, specialized businesses and access to new markets. The development raises a fundamental question: Is this evidence of Germany's continuing economic strength, or are foreign investors taking advantage of the country's structural weaknesses?
German companies are attracting more attention from international investors than they have in years. According to a recent analysis by auditing and advisory firm KPMG, the value of foreign acquisitions of German businesses increased by 134 percent within one year, reaching nearly $129 billion.
The study covers the period from the third quarter of 2025 through the second quarter of 2026 and is based on transaction data provided by financial information company LSEG.
One distinction is particularly noteworthy: While the total transaction value more than doubled, the number of recorded acquisitions rose only slightly, from 897 to 926. That represents an increase of just over three percent.
In other words, Germany is not suddenly experiencing twice as many foreign takeovers. Instead, a relatively small number of particularly large transactions has driven the overall value sharply higher.
A total of 18 acquisitions worth more than $1 billion each were announced during the reporting period. US investors were the buyers in ten of those billion-dollar deals.
Why Germany Remains Attractive Despite Its Weak Economy
At first glance, the strong foreign interest seems contradictory. Germany's economy has been grappling with structural problems for years, including high energy costs, regulatory burdens and an increasingly difficult international competitive environment.
Although economic output has recently returned to modest growth, the recovery remains fragile. According to preliminary calculations by Germany's Federal Statistical Office, gross domestic product increased by just 0.2 percent in the third quarter of 2026 compared with the previous quarter. Initial estimates also indicated a decline in investment.
Yet the attractiveness of individual companies cannot be measured simply by the performance of their home economy.
An industrial manufacturer may produce internationally competitive products, possess valuable technical expertise and serve markets with substantial long-term growth potential, even when economic conditions in its home country remain weak.
These are precisely the types of companies that international buyers find attractive.
KPMG expert Michael Buhl points to the combination of technological expertise, industrial capabilities and valuable data assets. Other factors include company valuations that appear relatively attractive to buyers and expectations of major government investment in infrastructure and defense.
For American corporations, acquisitions also offer an opportunity to gain access to established technologies, existing customer relationships and manufacturing expertise much faster than they could develop those capabilities independently.
German Technology for the American Market
One example of this strategy is the agreed acquisition of German ventilation specialist ebm-papst by US company Madison Air.
The transaction, announced in August, values the family-owned company based in Baden-Württemberg at approximately €5.1 billion, according to the businesses involved. Completion is expected toward the end of 2026 and remains subject to regulatory approvals.
For the American buyer, ebm-papst is attractive not only because of its existing operations. The company also develops highly energy-efficient ventilation and cooling systems that play an important role in large data centers.
As artificial intelligence expands worldwide, demand is growing for powerful data centers and the cooling technology needed to operate them.
The partnership with Madison Air is intended to give ebm-papst better access to the US market.
At the same time, the company has announced that it intends to retain its headquarters in Mulfingen, along with important research, development and manufacturing operations in Germany.
The case illustrates why a change of ownership does not automatically mean a loss of industrial significance.
An acquisition can also provide a company with access to new markets, additional capital and opportunities for growth.
However, the decisive question is whether commitments concerning investment and the future of existing locations are actually fulfilled over the longer term.
BASF and Volkswagen Are Also Selling Business Units
Another example is BASF's sale of a majority stake in its former coatings business to American investment firm Carlyle.
The transaction was completed at the end of June 2026, valuing the business at €7.7 billion. BASF received approximately €5.8 billion before taxes and retained a 40 percent stake in the company, which now operates under the name Surventis.
The German chemical group has explained that the transaction will release capital and allow it to concentrate more closely on its strategic core businesses.
Volkswagen has also found a foreign investor for a major industrial business.
In June, the group agreed to sell a 51 percent stake in Augsburg-based engine and plant engineering company Everllence to Bain Capital. Volkswagen intends to retain a 49 percent stake over the medium term.
The agreement includes specific employment guarantees. German production sites are to remain in operation until at least the end of 2030, with compulsory redundancies ruled out during that period.
These arrangements demonstrate that acquisitions can take very different forms.
A company is not always sold outright. In many cases, the previous owner retains a stake while a new investor contributes capital, management expertise or access to international distribution networks.
Selling business units can also be part of a broader strategic realignment. Large corporations may divest operations to concentrate their financial resources on other technologies and markets.
Artificial Intelligence Is Becoming a Major Driver
KPMG identifies technological transformation as one of the main reasons for increasing takeover activity.
The economic impact of artificial intelligence extends far beyond software companies and major American technology corporations.
Machinery manufacturers, automation specialists, industrial component suppliers and providers of technical infrastructure may also benefit from this development.
Artificial intelligence requires more than computing power. It also depends on reliable electricity supplies, cooling systems, sensors, industrial data and specialized manufacturing processes.
German companies possess decades of accumulated technological expertise in many of these areas.
By acquiring such businesses, foreign investors can gain access to these capabilities and integrate them into their existing international operations.
According to the KPMG study, 61 percent of surveyed executives from companies and the investment sector expect artificial intelligence to trigger a new wave of mergers and acquisitions over the next three years.
This is an expectation expressed by the respondents, not a development that has already materialized.
Nevertheless, it demonstrates how significant investors believe the technology will become in shaping their future decisions.
Fresh Capital or a Sell-Off of German Industry?
The growing number of foreign acquisitions also raises questions about who will ultimately control important German companies and technologies.
But two economically different transactions need to be distinguished.
An investor may provide new capital directly to a business to finance expansion, research or other investments.
Alternatively, the investor may simply acquire existing shares from their previous owners.
In the latter case, the purchase price initially goes to the sellers rather than automatically financing new machinery, research programs or additional jobs.
A high volume of acquisitions therefore does not necessarily translate into an equally large inflow of investment into German production facilities.
At the same time, foreign owners may provide substantial funding for the further development of the businesses they acquire.
Whether that happens depends on the buyer's strategy and the terms of the transaction.
Alongside the potential economic benefits, there are also risks.
Particularly when strategically important technologies are involved, questions arise about where future decisions on research, investment and production locations will be made.
Germany already has legal mechanisms allowing authorities to review certain foreign acquisitions.
In sectors relevant to national security, transactions may be examined and, under specific circumstances, restricted.
On October 22, the Federal Ministry for Economic Affairs also published a draft proposal to reform the country's foreign investment screening rules.
The aim is to identify security-related risks more precisely while simplifying the approval process for investments that do not raise such concerns.
The political challenge is to facilitate international investment without neglecting long-term security interests in particularly sensitive technologies and infrastructure.
German Companies Are Acquiring Businesses Abroad Too
International takeover activity is not moving in only one direction.
German companies are also increasing their acquisitions of foreign businesses.
According to the KPMG analysis, the number of such transactions rose from 593 to 622.
Their combined value increased by 15 percent to $42.9 billion.
The total value of foreign acquisitions of German companies is therefore considerably higher than the value of German acquisitions abroad.
Nevertheless, the figures demonstrate that German corporations are continuing to expand internationally themselves.
KPMG expects acquisition activity to increase further over the coming years.
By 2028, the number of domestic transactions within Germany could rise by 22 percent to approximately 1,300.
The firm also forecasts a 13 percent increase in acquisitions of German companies by foreign buyers, bringing the number to around 1,039 deals.
These are forecasts rather than guaranteed outcomes. Their realization will depend on economic conditions, financing costs and developments in international trade and investment.
Germany's Industrial Strength Comes at a Price
The growing international interest demonstrates that the difficulties facing the German economy should not be confused with a wholesale loss of its industrial capabilities.
Companies can possess advanced technologies, highly skilled employees, valuable patents and internationally successful products even when economic growth at home remains weak.
It is precisely these strengths that make them attractive to foreign investors.
High demand for German businesses is therefore neither automatic evidence of an industrial sell-off nor proof of successful economic policy.
Instead, it reveals that investors can assess the value of individual German companies very differently from the prospects of Germany as an economic location.
For the German economy, the crucial question is whether changes in ownership result in additional investment, access to new markets and the long-term preservation of jobs.
Ultimately, the economic value of German companies cannot be measured solely by their acquisition prices.
It also depends on what they develop, manufacture and contribute to industrial value creation in Germany in the years ahead.
