Beijing hits back over blocked factory sale
BEIJING has lashed out at the UK Government after Grant Shapps, the Business Secretary, blocked a Chinese state-backed company from purchasing a Welsh microchip factory.
A spokesman for China’s foreign ministry said it “resolutely opposes” the national security order forcing Nexperia, a Netherlands-based company, to sell its controlling stake in Newport Wafer Fab. “The British side should earnestly respect the legitimate rights and interests of Chinese enterprises, and provide a fair and non-discriminatory business environment for enterprises of all countries,” ministry spokesman Mao Ning told a media briefing.
Nexperia’s management have previously sought to downplay their company’s Chinese ownership. The Dutch business is owned by Wingtech Technologies, which is controlled by the Chinese state.
Newport Wafer Fab makes computer chips for the automotive and defence industries and Mr Shapps ordered Nexperia to divest at least 86pc of its ownership of the high-tech facility on Wednesday night, citing the risk of “technology and know-how” being transferred to China where it could “undermine UK capabilities”.
Nexperia completed a takeover of Newport Wafer Fab in 2021 for £63m after the factory ran into financial difficulties during the pandemic.
The deal was immediately brought to the Government’s attention, although formal scrutiny under national security powers did not begin until this May.
Mr Shapps’s decision to block the takeo- ver comes as Western governments take a more muscular approach to safeguarding critical infrastructure from foreign ownership and investment.
Nexperia’s UK boss, Toni Versluijs, has described the order as “legally wrong” and vowed to appeal it, setting up a court challenge to overturn the Business Secretary’s decision.
Mark Daniel, managing associate of law firm Linklaters’ antitrust and foreign investment team, said Nexperia’s chances of success in court were slim.
“It is possible that we will see an appeal of the decision to the High Court but, given that this is a ‘judicial review’ standard of review, we anticipate that this will be a high bar to satisfy in a National Security and Investment Act context.”