Berlin wall halts China firm’s Aixtron takeover
Germany is seeking tighter control over foreign investment in European companies, in a sign of a growing protectionist reaction to China’s appetite for overseas acquisitions.
Economy Minister Sigmar Gabriel on Monday reopened a review of the takeover of Aixtron, which supplies equipment to the semiconductor industry, by China’s Grand Chip Investment GmbH. That follows calls by Gabriel, who is also Chancellor Angela Merkel’s deputy, for European Union measures to give national governments more powers to block or impose conditions on shareholdings of non-EU companies.
While Merkel hasn’t publicly backed her vice chancellor’s push, Gabriel’s proposal reflects growing backlash within her government to unfettered Chinese investment in Europe’s biggest economy following the purchase of German robot maker Kuka by China’s Midea Group. Gabriel has found an ally in EU Digital Economy Commissioner Guenther Oettinger, a Merkel appointee who’s a member of her party.
“It’s absolutely right to initiate this debate at the European level,” Oettinger said in an interview last week. “Everybody has to play by the same rules. Clearly, there are many countries, including big ones such as China, that make market access or corporate takeovers difficult or effectively impossible.”
In the Aixtron case, the company said on Monday that the Economy Ministry had withdrawn a so-called clearance certificate issued on September 8 for Fujian Grand Chip Investment Fund, an indirect shareholder of Grand Chip.
Aixtron wants to assist the bidder and authorities to alleviate possible concerns about the takeover, Guido Pickert, an Aixtron spokesman, said on Monday by phone. “Like everyone else, we were surprised,” he said. The ministry declined to immediately comment when contacted by Bloomberg.
Grand Chip agreed in May to buy Aixtron in a deal valued at ^670 million ($728 million). The purchase could help the company access the Chinese market and develop its product portfolio, after losing its largest customer last year.
Aixtron shares dropped as much as 8.3 per cent to ^5.32 and traded 6.2 per cent lower as of 10:13 am on Monday in Frankfurt. That pared the stock’s gain this year to 32 per cent, giving the German company a market value of ^613 million.
The initiative by Gabriel calls for allowing EU member states to step in if a non-EU investor seeks to acquire more than 25 per cent of the voting rights in a company, according to a government document obtained by Bloomberg. Restrictions would potentially kick in if the home country restricts foreign investment or its government orders or funds the acquisition.