The German cabinet is expected to approve a new law to protect Volkswagen workers in the event of a takeover.
The new law will replace a previous so-called Volkswagen Law that was ruled illegal last year by the European Court of Justice because it hindered the free flow of capital.
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The Bild newspaper reported today that German Chancellor Angela Merkel’s cabinet will approve the law next week.
The existing law gives shareholders a blocking minority if they have a 20% stake in the company. In this case Volkswagen’s second largest shareholder, the state of Lower Saxony has a blocking minority. Normally in Germany, a shareholder would have to have a 25% stake to have this status.
Bild reported that Lower Saxony would retain a blocking minority under the new law, but Volkswagen would be able to close plants without first having to obtain approval from workers’ representatives on the company’s supervisory board.
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