The headquarters of German chip equipment maker Aixtron SE in Herzogenrath, Germany.
Beijing: A Chinese company yesterday said that it had scrapped plans to purchase German semiconductor equipment maker Aixtron after US President Barack Obama blocked a key element of the deal on security concerns.
The Chinese government-backed Grand Chip Investment said its offer could no longer go through after Washington rejected the inclusion of Aixtron’s US unit over fears it could put sensitive technology with potential military applications in Chinese hands.
In a statement, Grand Chip said the block meant that the conditions of the deal “no longer can be fulfilled”. “Any contracts based on the acceptance of the takeover offer will not become effective.”
The failure of the proposed €670m ($714m) takeover comes at a time of growing unease in the West about a recent slew of Chinese takeovers, often by state-backed companies.
The death knell for the Aixtron deal came last week after a review by the Committee on Foreign Investment in the United States (CFIUS) chaired by Obama found that the national security risks were too great.
In a statement last Friday, the US Treasury said Aixtron’s expertise in advanced compound semiconductors used for LED lighting, lasers and solar cells also has military applications. The Treasury said Aixtron’s US business was an important contributor to that technology.
Beijing expressed frustration in response, saying it was opposed to “politicising normal business behaviour” and accusing Washington of making “groundless accusations” against Chinese firms.
The troubled deal had also come under scrutiny in Germany where Chinese companies have bought a record number of tech firms this year, sparking criticism of homegrown intellectual property being sold off to Beijing.
After initially giving the proposed Aixtron takeover its blessing, the German government withdrew its approval in late October following security worries raised by Washington.
