EU Court Judgment in Case C-106/22 Xella Magyarország

Thursday 13th July 2023

Judgment in Case C-106/22 Xella Magyarország

(Free movement of capital)

The Hungarian company Xella Magyarország, which manufactures concrete construction elements, is challenging before a Hungarian court the decision of the Hungarian Minister for Innovation and Technology prohibiting it from acquiring the Hungarian company Janes and Társa, which operates a gravel, sand and clay quarry.

Xella Magyarország is owned by a German company, which in turn is owned by a Luxembourg company, which in turn is indirectly owned by an umbrella company established in Bermuda and ultimately owned by an Irish national.

The Minister considered that Janes and Társa must be considered strategic within the meaning of Hungarian legislation establishing a foreign investment screening mechanism, which was adopted in the wake of the Covid-19 pandemic.

According to the Minister, the assumption that Janes and Társa would indirectly become the property of a company registered in a third State, namely in Bermuda, posed a longer-term risk to the security of supply of raw materials for the construction sector, particularly in the region where that company was established.

The Hungarian court asked the Court of Justice whether the foreign investment screening mechanism in question, as applied in the present case, was compatible with EU law.

Background Documents C-106/22