German ministers approved Wednesday a draft law to tighten controls on foreign takeovers of domestic companies, in a long-planned reform lent fresh urgency by the outbreak of the coronavirus pandemic.

Though already in progress before the COVID-19 crisis, the change -- which must still be voted on by MPs -- comes amid concerns over a shortfall in critical supplies, and just weeks after an alleged US bid for a German biotech firm's cutting-edge vaccine research.

"The current situation shows that we in Germany and Europe need certain capabilities and technologies... to better protect our security interests", said Economy Minister Peter Altmaier on Wednesday.

He added that the new law would serve "essential German security interests, including the provision of vital goods such as vaccines". Last month, German biotech firm CureVac was forced to deny newspaper reports that the US had offered to pay "a billion dollars" for exclusive rights to its research into a coronavirus vaccine.

The company denied all knowledge of the offer, and a US official dismissed the report as "wildly overplayed".

Yet it sparked outrage in Berlin, with Altmaier insisting that "Germany is not for sale". On Wednesday, the economy minister did not mention CureVac by name, but said that some "cases" showed "we need to act in the coronavirus crisis".

The new law "provided an example to our European partners," he claimed.

A key element of the reform is lowering the threshold for Berlin to block a takeover by an investor based outside the EU.

Instead of demonstrating that the acquisition presents a real danger to German security, in future officials will only have to prove a "likely impact".

Meanwhile, takeovers will be placed on ice while the government makes such assessments, preventing the new owners laying hands on any of the target firm's intellectual property.

The government would also be able to assess investments in a more "thorough and forward-looking" way, said Altmaier.

As well as medical companies, the measure will extend to vital infrastructure and companies in other areas such as telecommunications, he added.

In line with the rest of the European Union, Germany has moved to tighten controls on investments from abroad in recent years.

The coronavirus pandemic has ramped up the pressure as crucial supplies like protective clothing and masks run short.

On Monday, Chancellor Angela Merkel said Europe needed to become "self-sufficient" in the production of medical gear as a result of the crisis.

The German government would "decide in the near future how we can install the production of medical equipment more strongly in Germany and Europe," said Altmaier on Wednesday.