Golden Shares and New State Capitalism

France, for example, abolished its golden share in Elf Aquitaine but could rely on an established FDI screening regime in the energy sector to protect its security-of-supply concerns. The United Kingdom similarly removed its golden shares in water and electricity companies, where sectoral regulators already exercised effective oversight. In contrast, Germany and Italy, which lacked comparable fall-back instruments, fought prolonged rearguard actions: Germany adopted a revised Volkswagen Law in 2008 that removed the appointment right and voting cap but preserved the 20 per cent blocking minority, prompting a second round of infringement proceedings. The Oxera study commissioned by the Commission in 2005 provided supporting empirical evidence for the costs of these arrangements: in the UK water and electricity sectors, the expiry of golden shares that had capped voting at 15 per cent triggered a surge in takeover activity, with all but one of the twelve regional electricity companies acquired within two years, generating significant takeover premia for shareholders. Portugal and Greece ultimately abolished their golden shares under the terms of the Troika rescue packages.

The 2025 Renaissance

Several converging geopolitical developments have brought golden shares back to the centre of policy debate. The disruption of European energy supplies following the Russian invasion of Ukraine exposed dependencies in critical infrastructure. Intensified US-China technological competition and concerns about the transfer of sensitive know-how have heightened awareness of foreign investment risks. In China itself, the government in 2023 acquired golden shares in its two largest technology companies, Alibaba and Tencent, in what may represent only the visible portion of a wider network of state influence exercised through layered shareholding structures. A broader political shift towards economic sovereignty — reflected in the EU's European Economic Security Strategy of June 2023 and the January 2024 package of five economic security initiatives — has created a new receptivity to mechanisms of state influence that would have been politically unthinkable a decade earlier.

The most prominent recent example is the Nippon Steel/U.S. Steel transaction of June 2025, in which the Trump administration secured a perpetual golden share granting the US government a board seat, veto powers over key corporate decisions, and the ability to block asset relocations as a condition for approving the USD 14.9 billion acquisition. The arrangement marked a striking departure from traditional US non-interventionism and signalled a willingness by governments to deploy direct corporate control instruments in the name of national security and industrial revival. The golden share was held personally by the President, passing to the Treasury and Commerce Departments after his term.

In Australia, a different model emerged in 2025. Austal, the country's largest defence exporter, structured a "self-imposed golden share" arrangement granting the Commonwealth information and veto rights over its defence shipbuilding subsidiary, along with a call option exercisable upon a change of control — effectively using the golden share as a defensive shield rather than an instrument of state intrusion.

EU Foreign Direct Investment Screening

In Europe, the political demand for strategic economic control has taken the parallel and arguably more systematic track of foreign direct investment screening. The original EU FDI Screening Regulation (Regulation (EU) 2019/452), fully applicable since October 2020, established a cooperation mechanism enabling Member States and the Commission to exchange information on foreign investments that may affect security or public order. By the end of 2024, 24 out of 27 Member States had enacted national screening legislation, and 477 investments were notified to the EU mechanism in that year.

On 24 January 2024, the Commission proposed a comprehensive revision of the FDI Screening Regulation as part of a broader economic security package. After a year of inter-institutional negotiations, the European Parliament, Council, and Commission reached a provisional political agreement on 11 December 2025. The revised Regulation will, for the first time, make FDI screening mechanisms mandatory in all Member States, introduce a common minimum scope for compulsory screening, extend coverage to investments made through EU subsidiaries under foreign control, and increase procedural harmonisation — while preserving the principle that screening decisions remain the exclusive responsibility of the Member State concerned.

Implications for Corporate Governance

The revival of golden shares and the strengthening of FDI screening raise a series of questions that sit at the intersection of corporate governance, constitutional law, and geopolitical strategy. For institutional investors, the expansion of state veto rights in portfolio companies creates uncertainty about the market for corporate control, the enforceability of shareholder rights, and the predictability of regulatory outcomes in cross-border transactions. For issuers, golden shares alter the balance of power at the board level and may affect the cost of capital. For the European single market, the challenge is to reconcile the legitimate demand for economic security with the fundamental freedoms on which capital market integration depends.

The CJEU's jurisprudence remains stringent: golden shares are viable only in highly constrained forms, typically tied to FDI screening under Regulation (EU) 2019/452, and always subject to proportionality review. Whether the new generation of golden share arrangements — more sophisticated, more politically embedded, and more explicitly tied to national security narratives — can be reconciled with these principles is an open question and one of considerable practical importance for the governance of European companies.