Obama blocks Chinese company's takeover of Aixtron's U.S. business

[TaiShang]

Obama blocks Chinese company's takeover of Aixtron's U.S. business

(Xinhua) 13:58, December 03, 2016

U.S. President Barack Obama on Friday blocked a Chinese company's purchase of the U.S. business of German chip equipment maker Aixtron, despite objections from China.

Obama issued an order directing China's Fujian Grand Chip Investment Fund (FGC) to "fully and permanently abandon" the proposed acquisition of Aixtron' s U.S. business, the U.S. Department of Treasury said Friday evening in a statement.

The Committee on Foreign Investment in the U.S. (CFIUS), which reviews foreign purchases of U.S. companies, and Obama assess that "the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation, " the statement said.

The U.S. president and the CFIUS have the power to block any deal if they consider national security is threatened. The traditionally opaque review process has become one of the top concerns for Chinese investments in the United States.

China had urged the Obama administration not to politicize the proposed takeover ahead of Washington announcing that decision.

"The case...is a normal business acquisition and thus should be dealt with according to business principle and market rules," Chinese Foreign Ministry spokesperson Geng Shuang said at a regular briefing on Friday.

"We hope there will not be too much political interpretation of this normal business activity, still less political disruption," he said.

This is not the first time that Obama has intervened to block a takeover involving a Chinese company. In 2012, Obama blocked Chinese

-owned Ralls Corp. from owning four wind farms in Oregon, citing national security risks as their locations were too close to a military facility.

Ralls sued Obama and the CFIUS for exceeding constitutional rights and failing to provide detailed evidence. In 2014, an U.S. court ruled that Obama and the CFIUS failed to give a constitutional due process to Ralls.

@Shotgunner51

 

[Shotgunner51]

Obama blocks Chinese company's takeover of Aixtron's U.S. business

(Xinhua) 13:58, December 03, 2016

U.S. President Barack Obama on Friday blocked a Chinese company's purchase of the U.S. business of German chip equipment maker Aixtron, despite objections from China.

Obama issued an order directing China's Fujian Grand Chip Investment Fund (FGC) to "fully and permanently abandon" the proposed acquisition of Aixtron' s U.S. business, the U.S. Department of Treasury said Friday evening in a statement.

The Committee on Foreign Investment in the U.S. (CFIUS), which reviews foreign purchases of U.S. companies, and Obama assess that "the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation, " the statement said.

The U.S. president and the CFIUS have the power to block any deal if they consider national security is threatened. The traditionally opaque review process has become one of the top concerns for Chinese investments in the United States.

China had urged the Obama administration not to politicize the proposed takeover ahead of Washington announcing that decision.

"The case...is a normal business acquisition and thus should be dealt with according to business principle and market rules," Chinese Foreign Ministry spokesperson Geng Shuang said at a regular briefing on Friday.

"We hope there will not be too much political interpretation of this normal business activity, still less political disruption," he said.

This is not the first time that Obama has intervened to block a takeover involving a Chinese company. In 2012, Obama blocked Chinese

-owned Ralls Corp. from owning four wind farms in Oregon, citing national security risks as their locations were too close to a military facility.

Ralls sued Obama and the CFIUS for exceeding constitutional rights and failing to provide detailed evidence. In 2014, an U.S. court ruled that Obama and the CFIUS failed to give a constitutional due process to Ralls.

@Shotgunner51

US government suffers "national security" paranoia again? Zoom out and look at the big picture, a deficit-stricken debtor nation gonna block every asset takeover deals by China? Anyway let's fire a lawsuite on them, on their soil (US court), like 2014 Ralls case, let's see how they defend "national security".

 

[TaiShang]

US government suffers "national security" paranoia again? A deficit-stricken debtor nation gonna block every asset takeover deals by China? Anyway let's sue them then, like 2014 Ralls case, let's see how they defend "national security".

I wonder the German owner has any means to bypass. Can't they move the business arm out of the US and then sell it off?

 

[Shotgunner51]

I wonder the German owner has any means to bypass. Can't they move the business arm out of the US and then sell it off?

Technically speaking there are numerous ways to bypass, without moving German assets out of US. In general, it's like "proxy war", bankers and experienced lawyers all know how to perform these stunts. For example, check the gigantic amount of US treasury bills hold by Carribbean banking center, and Euroclear in Belgium, don't tell me the locals own them.

 

[TaiShang]

Technically speaking there are numerous ways to bypass, without moving German assets out of US. In general, it's like "proxy war", experienced lawyers know how to perform these stunts. For example, check how many US treasury bills are hold by Carribbean banking center, and Euroclear in Belgium.

I think it depends on how much the China company wants the deal.

 

[AZADPAKISTAN2009]

Can't prevent folks from doing business

 

[Shotgunner51]

I think it depends on how much the China company wants the deal.

It depends on whether the deal is purely commercial, or has strategic mandate (backed by Chinese sovereign wealth fund, who can pull political strings). Targeting strategic assets, say core component industries, US grid or US cyberspace-related utilities, is national goal.

 

[DCS]

Aixtron specializes in MOCVD processes, which involves growing crystalline layers on a substrate. This is vital for the production of semiconductors. CFIUS is blocking this deal due to its potential uses for GaAs and GaN applications, which as you are likely aware, are used in microwave applications such as radar. The acquisition of the Philips LED division was blocked a while back for the exact same reasons.

CFIUS uses criterion that are broad enough to block almost any conceivable deal between China and any entity that has operations in the United States. In my opinion, in terms of industrial advantages, Aixtron is not critical to China. FGC should take its money and walk.

 

[Viet]

I wonder the German owner has any means to bypass. Can't they move the business arm out of the US and then sell it off?

the shareholders have not the final say. theoretially the german government can approve the sale of german assets, but that is now unlikely because the US government rejects the deal. even if the german government says ok, the EU executive body will have a say too.

 

[TaiShang]

the shareholders have not the final say. theoretially the german government can approve the sale of german assets, but that is now unlikely because the US government rejects the deal. even if the german government says ok, the EU executive body will have a say too.

It is better to concentrate on European assets that are based in Europe.

 

[Viet]

Aixtron specializes in MOCVD processes, which involves growing crystalline layers on a substrate. This is vital for the production of semiconductors. CFIUS is blocking this deal due to its potential uses for GaAs and GaN applications, which as you are likely aware, are used in microwave applications such as radar. The acquisition of the Philips LED division was blocked a while back for the exact same reasons.

CFIUS uses criterion that are broad enough to block almost any conceivable deal between China and any entity that has operations in the United States. In my opinion, in terms of industrial advantages, Aixtron is not critical to China. FGC should take its money and walk.

actually Aixtron produces machines that manufactures critical simiconductor components as you listed. the US government fears the chinese government will misuse Aixtron machines to manufacture components for nuclear weapons.

It is better to concentrate on European assets that are based in Europe.

if you want to buy Aixtron european assets, you must convince both the german government and EU executive body. that is extremtly difficult becasue the wind has changed.

 

[TaiShang]

if you want to buy Aixtron european assets, you must convince both the german government and EU executive body. that is extremtly difficult becasue the wind has changed.

Nonetheless, M&A activity toward Europe has grown 40% this year.

 

[Jlaw]

Obama blocks Chinese company's takeover of Aixtron's U.S. business

(Xinhua) 13:58, December 03, 2016

U.S. President Barack Obama on Friday blocked a Chinese company's purchase of the U.S. business of German chip equipment maker Aixtron, despite objections from China.

Obama issued an order directing China's Fujian Grand Chip Investment Fund (FGC) to "fully and permanently abandon" the proposed acquisition of Aixtron' s U.S. business, the U.S. Department of Treasury said Friday evening in a statement.

The Committee on Foreign Investment in the U.S. (CFIUS), which reviews foreign purchases of U.S. companies, and Obama assess that "the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation, " the statement said.

The U.S. president and the CFIUS have the power to block any deal if they consider national security is threatened. The traditionally opaque review process has become one of the top concerns for Chinese investments in the United States.

China had urged the Obama administration not to politicize the proposed takeover ahead of Washington announcing that decision.

"The case...is a normal business acquisition and thus should be dealt with according to business principle and market rules," Chinese Foreign Ministry spokesperson Geng Shuang said at a regular briefing on Friday.

"We hope there will not be too much political interpretation of this normal business activity, still less political disruption," he said.

This is not the first time that Obama has intervened to block a takeover involving a Chinese company. In 2012, Obama blocked Chinese

-owned Ralls Corp. from owning four wind farms in Oregon, citing national security risks as their locations were too close to a military facility.

Ralls sued Obama and the CFIUS for exceeding constitutional rights and failing to provide detailed evidence. In 2014, an U.S. court ruled that Obama and the CFIUS failed to give a constitutional due process to Ralls.

@Shotgunner51

It's ok . Let more Americans be unemployed. I need more Americans to serve me when I go there for business.
Low wage service jobs is what the Americans are planning for the future.

 

[KediKesenFare3]

To tell the true, the German public doesn't support deals like this with China. More and more German politicians are demanding a permanent aquisation ban for Chinese investors as long as German investors don't have the same rights in China.

 

[Jlaw]

To tell the true, the German public doesn't support deals like this with China. More and more German politicians are demanding a permanent aquisation ban for Chinese investors as long as German investors don't have the same rights in China.

What do you mean by rights? German investors don't have as much cash as Chinese business men. Money talk ...