Morning Briefing: Biontech, Curevac – und die Bilanz des Staats als Unternehmer

Biontech, a once-promising biotech company based in Mainz, is now shrinking down to the size it would not have easily grown without the coronavirus vaccine boom. The company is closing three German locations and the 1800 associated jobs. The Curevac case from Tübingen, acquired last year, is particularly interesting. Curevac founder Ingmar Hoerr called the entire affair "toxic": The state indeed invested 300 million euros in the company six years ago, and further funds totaling up to 250 million euros flowed into Tübingen in subsequent years.

After the acquisition, the state received a 0.6 percent stake in Biontech, which it reportedly sold for around 130 million euros at the current price. A private investor would likely be advised to invest in fixed-income securities instead, a suggestion the state could also consider. The state's other ventures into entrepreneurship have mixed results.

In the case of Commerzbank, the state's poorly prepared sale process allowed Unicredit to enter and subsequently attempt to take over, achieving the opposite of its goal. The 680 million euros in Corona aid for Galeria, of which 552 million have been lost, is an example where the story could end. However, there are two counterexamples: In 2018, the state bought 20 percent of the network operator 50Hertz to prevent Chinese involvement, and in 2020, it acquired 25.1 percent of the defense electronics conglomerate Hensoldt for 464 million euros, which is now worth more than two billion euros.

The state's approach seems to be based on luck, as investors need to hope for good timing. The Hensoldt value increase was less due to good investment and more because of Russia's invasion of Ukraine in 2022. Germany's fear of China seems to be the driving force behind these actions.