Chinese Takeover of Aixtron Collapses After U.S. Ban
December 08 2016 - 9:00AM
Dow Jones News
FRANKFURT—A Chinese takeover bid for Germany's Aixtron SE
collapsed Thursday, a week after President Barack Obama blocked the
deal on national security grounds, according to a statement from
the buyer.
The contentious €670 million ($723 million) offer for the
semiconductor company was thrown into question this fall when
Germany's economic ministry raised security concerns about the bid,
made by Fujian Grand Chip Investment Fund LP's German unit. These
concerns were echoed by authorities in the U.S., resulting in last
week's outright ban on the acquisition by President Obama.
Grand Chip on Thursday said the deal failed due to the U.S. ban.
In recent days there had been speculation that the deal could go
through if Aixtron were to divest its U.S. operations.
Under U.S. law, U.S. officials were able to block the takeover
of Aixtron's U.S. subsidiary Aixtron Inc. A statement from Grand
Chip said that this block meant the takeover offer wasn't fulfilled
and caused the deal to collapse.
The deal failure highlights escalating tension between Beijing
and Western governments about Chinese purchases of Western
technology assets and follows a warning Tuesday from U.S. lawmakers
about a proposed Chinese takeover of an U.S. semiconductor
manufacturer.
Twenty-two House lawmaker lawmakers on Tuesday wrote to Treasury
Secretary Jacob Lew raising concerns about the proposed purchase of
Lattice Semiconductor Corp. by Canyon Bridge Capital Partners Inc.,
a new private-equity firm backed by investors in China.
The lawmakers warned Mr. Lew that Canyon Bridge appeared to be
directly affiliated with the government of the People's Republic of
China, according to a letter seen by the The Wall Street Journal.
Security analysts raised similar concerns about Fujian Grand Chip
Investment Fund's ownership structure, although China insists both
takeovers are normal investment activities.
Security analysts have warned China is attempting to acquire
sensitive Western semiconductor technology as pioneered by Aixtron
and Lattice. People familiar with the work of CFIUS believe a
semiconductor technology based on gallium nitride, or GaN, could
have been the focus of security concerns in the Aixtron deal.
A spokeswoman for Germany's economy ministry said the removal of
the offer by Grand Chip meant Berlin would no longer continue to
review the case.
Germany has been the top European destination for Chinese
M&A activity in 2016. Chinese companies have acquired German
companies at the rate of about one a week since January, according
to data provider Dealogic. Chinese companies have spent more than
$11 billion on German companies this year, eclipsing the previous
record of $2.6 billion in 2014.
Write to William Wilkes at william.wilkes@wsj.com
(END) Dow Jones Newswires
December 08, 2016 08:45 ET (13:45 GMT)
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