U.S. Regulators Move to Stop Chinese Takeover of German Tech Firm Aixtron
CFIUS flagged security concerns over acquisition by German unit of China’s Fujian Grand Chip Investment, says Aixtron
FRANKFURT—U.S. regulators are yet again set to block a takeover of a European technology company by a Chinese buyer, a further sign of how China Inc.’s recent shopping binge is raising security concerns in the Western world.
German technology firm Aixtron SE late Friday said it was informed by the powerful Committee on Foreign Investment in the U.S., or CFIUS, about “unresolved U.S. national security concerns regarding the proposed transaction.”
The news comes after Germany’s economics ministry late last month withdrew its earlier approval and reopened a review of the €670 million ($710 million) acquisition of Aixtron by Grand Chip Investment GmbH, the German unit of China’s Fujian Grand Chip Investment Fund LP.
Aixtron, a chip-equipment manufacturer, said CFIUS recommended the parties “abandon the entire transaction” and that the authority plans to recommend to the U.S. President the transaction be prohibited. Aixtron said the U.S. President “must now render his decision to block or allow the proposed transaction within 15 calendar days.”
A spokesman for Fujian Grand Chip Investment declined to comment.
Aixtron shares dropped about 4% in Germany’s after-hours trading late Friday.
The company has been struggling the past few years, especially after China’s Sanan Optoelectronics Co. cut back on a large order late last year. The move shaved nearly half of Aixtron’s market value and left the company looking for a buyer.
Months later, Grand Chip Investment, another Chinese enterprise from the province of Fujian, offered to buy Aixtron.
CFIUS involvement in large deals isn’t new. Dutch electronics firm Royal Philips NV this year canceled the sale of its lighting component and automotive-lighting unit to a Chinese investor because CFIUS torpedoed the deal on security concerns.
In Germany, lighting company Osram Licht AG is scrambling to get approval from the German government for the sale of its lightbulb businesses to China’s MLS Co. Sanan and MLS have both considered acquiring Osram altogether, people familiar with the matter said earlier. Those people added it is unlikely a move to buy Osram would be feasible given political backlash amid resistance from labor unions.