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Chinese firm scraps German tech deal after US block

aixtron

Beijing, China | AFP | 

A Chinese company has scrapped plans to purchase German semiconductor equipment maker Aixtron after US President Obama blocked the deal, the company said Thursday.

The Chinese government-backed Grand Chip Investment said its offer could no longer be fulfilled after Washington rejected the inclusion of Aixtron’s US unit over concerns it could put sensitive technology with potential military applications in Chinese hands.

In a statement released on its website, the company 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.”

In a statement last week, the US Treasury said publicly traded Aixtron SE’s expertise in technology, which is key to making advanced compound semiconductors used for LED lighting, lasers and solar cells, also has military applications.

Washington does not want to see such technology end up in the hands of a Chinese government-backed company.

The Treasury said Aixtron’s US business was an important contributor to that technology.

In late October, the German government withdrew its initial approval for the 670-million-euro ($714-million) takeover after Washington raised security concerns.

Citing German intelligence sources, Handelsblatt daily reported that the US had expressed fears that China could use Aixtron technology to bolster its nuclear programme.

After receiving the information, the German economy ministry said on October 24 that it would reopen its review of the deal.

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