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Germany Blocks Aixtron Sale to China, Berlin Says

According to reporting by Deutsche Welle, China’s Fujian Grand Chip Investment Fund (FGC) will not be purchasing a majority share of Aixtron, which is involved in the manufacturing of light emitting diodes and semiconductors. The German chip maker had been the target of a €670 million (C$977 million) takeover, and part of a wave of deals undertaken by Chinese firms in Germany which include the €4.5 billion purchase of German robot maker Kuka by Chinese appliance manufacturer Midea.

On October 21, Aixtron had offered a 65% share of the company to FGC, one of the US$12 billion (C$16 billion) in this year’s announced bids or completed deals by Chinese companies for German ones. China’s successfully completed bids for German firms have risen from €263 million and 29 deals in 2015 to €10.3 billion and 47 deals in the year so far, an increase in euro volume of almost 40 times. This number is likely to increase with this November’s delegation to China of 60 German businesses and the German Vice Chancellor and Minister for Economic Affairs, who were seeking to capitalise on and increase the previous year’s €163 billion in trade between the two countries.

Germany has some 2,000 Chinese companies operating within it, and 8,200 German companies operate within China. Elsewhere in Europe, China is pushing for increased relations with sixteen European countries under its 16+1 framework, and is lobbying for market economy status in the European Union 15 years after the country joined the World Trade Organization. However, there have been moves to limit China’s activities not just in Germany but in the broader EU, with government documents indicating that the German Minister of Economic Affairs is proposing rules to allow EU states to restrict non-EU investors from acquiring over 25% of EU firms, which would have potentially blocked deals such as the €6.5 billion Chinese purchase of Irish aircraft firm Avolon Holdings last year.

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