U.S. intelligence services warned Berlin that a now on-hold Chinese takeover of German semiconductor equipment maker Aixtron (aixxf) could give Beijing access to technology that could be used for military purposes, business daily Handelsblatt said.
The German Economy Ministry said Monday it had withdrawn its approval for Fujian Grand Chip Investment Fund (FGC) to buy the Aachen-based firm for 670 million euros ($732 million), citing previously unknown security-related information.
The ministry declined to comment further in light of the Handelsblatt report on Wednesday and said it could give no details on the “origin or the nature” of the information that led to clearance being withdrawn.
A spokeswoman added the review would likely take between two and three months once the ministry had collected all relevant documentation.
Aixtron shares dropped 7.1% in Frankfurt Wednesday to a five-month low of 4.84 euros, well below the 6 euros per share that FGC had offered shareholders for their stock.
The newspaper, citing German intelligence sources, said U.S. authorities had shown representatives of German ministries evidence last Friday, at a meeting at the U.S. embassy in Berlin, although they refused to hand it over.
Concern is growing in Berlin about losing key technology to China after a string of Chinese acquisitions of German companies, including robotics group Kuka AG. However, many are niche companies that, while dominant in their particular specialties, are nowhere near big enough to deter predators from China, which has spent nearly $200 billion on foreign acquisitions this year alone.
Aixtron sells its equipment, which is used to deposit chemical layers on silicon wafers, mainly to LED (light-emitting diode) chipmakers. It is not designed for military purposes but analysts say it could be adapted, with some difficulty.
The U.S. Committee on Foreign Investment in the United States (CFIUS), which reviews takeovers from a national security perspective, in January blocked a plan by Dutch company Philips (phg) to sell its Lumileds LED business to Chinese buyers.