German government blocks two company acquisitions by China

German Minister for Economic Affairs and Climate Protection Robert Habeck speaks during a press statement on the investment review process for the planned sale of the chip production of the Dortmund-based company Elmos to Chinese companies. Photo: Michael Kappeler/dpa

The German government has blocked the sale of two German companies to Chinese investors, Economy Minister Robert Habeck announced on Wednesday.

Habeck had previously warned against the sale of Dortmund-based microchip producer Elmos due to security concerns, and he confirmed the decision by the Cabinet on Wednesday.

The other case is subject to corporate secrecy, so he could not go into details, Habeck said.

Handelsblatt newspaper reported earlier that the German government wanted to prohibit the sale of Bavarian-based ERS Electronics, a global semiconductor electronics producer.

Habeck said that Germany was an open market economy and that investments from abroad were welcome.

“But an open market economy is not a naive market economy,” he said.

China is and should remain a trading partner, he said. However, trade could be used for power politics and possibly against the interests of the state, he said. In certain critical sectors, dependencies must be reduced, Habeck said.

Elmos had announced plans to sell its microchip wafer production business to Swedish competitor Silex, a subsidiary of the Chinese Sai group, for around €85 million ($85 million).

Habeck said on Tuesday that potentially critical sectors such as semiconductor production should be viewed as sensitive and that potential Chinese investments in those sectors would need to clear “higher hurdles” to win government approval.

Local leaders in Dortmund, including Mayor Thomas Westphal, had expressed concerns that blocking the sale might put jobs at the Elmos production facility at risk.

The chips produced in Dortmund are an older technology that Elmos no longer uses in its own product lines. But those chips nonetheless remain important for medical test devices.

The decision by the German government to block the purchase comes after Chancellor Olaf Scholz pushed through a controversial deal to allow the Chinese state-owned shipping firm Cosco to buy a 24.9% stake in a terminal at the port of Hamburg.

Several ministers, including Habeck, had objected to the deal.

 

 

Courtesy © dpa Deutsche Presse-Agentur GmbH www.dpa.com

 

 

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