The US Committee on Foreign Investment (CFIUS) has recommended that the proposed takeover of the German deposition equipment firm Aixtron by Grand Chip Investment (GCI) should be prohibited. GCI is a 100 percent indirect subsidiary of the Chinese Fujian Grand Chip Investment Fund.
CFIUS did not issue a close-out letter, but rather informed GCI and Aixtron that, from CFIUS' perspective, there are unresolved US national security concerns regarding the proposed transaction.
Its conclusion was that there would be no reasonable way to mitigate the US national security risks perceived by CFIUS on the basis of the mitigation proposals submitted by the parties to date. As a consequence, CFIUS recommended the parties request withdrawal of their notice and abandon the entire transaction.
Both, GCI and Aixtron have decided not to follow such recommendation as a result of which the matter has been referred to the US President for decision in line with CFIUS statutes. Under the CFIUS statute, the US President must render his decision to block or allow the proposed transaction within 15 calendar days.
This follows last month’s news that the German Ministry of Economics had withdrawn its clearance certificate for the takeover. This was thought to be due to growing concerns in Germany about the acquisition of cutting-edge technologies by Chinese firms and subsequent loss of knowhow and high-tech jobs.
GCI and Aixtron state that they plan to continue to actively engage in further discussions to explore means of mitigation that may be amenable to CFIUS or the US President to resolve outstanding US national security concerns or to take other alternative measures that could allow the parties to proceed with the transaction.