A Sudden Turn of Events: Increased Opposition to Chinese Acquisitions in Germany
Only a few months ago, Chinese bidders seemed to be announcing the purchases of venerable German firms almost on a weekly basis. By mid-November 2016, Chinese companies announced or completed German acquisitions worth a record €11.3 billion (US$12 billion), almost eight times the level of 2015, according to Bloomberg data. Until recently, none of them faced any opposition from the public, politicians or regulators. Deals included the sale of the incinerator specialist EEW to Beijing Enterprises for €1.8 billion and the takeover by China National Chemical of the time-honoured machinery maker KraussMaffei for just under €1 billion. And finally, with the purchase of a €4.6 billion stake in the robot manufacturer KUKA, Chinese buyer Midea gained access to one of Germany’s high-tech jewels. For a long time it appeared that Chinese investors were welcomed in Germany with open arms — a mistaken view, as it is now emerging.
A prime example of what might be understood as a sudden policy shift is the case of Aixtron, a struggling semiconductor equipment manufacturer based in Herzogenrath in the state of North Rhine-Westphalia. Until recently, the company attracted little notice except among industry experts and specialists in German equity markets. That changed overnight. In a surprise move at the end of October 2016, the German government revoked its approval for the planned takeover of Aixtron by the Chinese firm Fujian Grand Chip Investment (FGCI). It is now considered a near-certainty that U.S. intelligence services were behind the deal being blocked.
Senior Managing Director