In the news: Germany reconsiders Grand Chip-Aixtron, two bicycle-sharing startups go head-to-head, Amazon competes with Alibaba, and China supports SMEs and tightens food safety

Germany withdraws approval of Aixtron takeover

Germany's economics ministry has withdrawn its clearance of a €670 million ($740 million) acquisition of Aixtron SE by Grand Chip Investment GmbH, the German unit of China's Fujian Grand Chip Investment Fund LP. The planned purchase was to be part of a raft of Chinese acquisitions of German technology firms that has stirred concern over national security. German law allows the economics ministry to halt an inbound takeover only if it poses a threat to public order or security. The deal in question follows Midea Group's $5 billion bid for German robotics maker Kuka AG, after which the economics ministry actually proposed putting together a European consortium to make a counterbid. But the plan never materialized and Midea completed its acquisition this summer. Chancellor Angela Merkel said during a June visit to China that an asymmetrical situation allows China to buy high-tech expertise in Germany's open market and use it to build protected champions at home. Her deputy and economy minister Sigmar Gabriel, who reopened the Aixtron case, said at an industry lobby meeting that “The EU has to take a clear position toward China.” China shouldn't be surprised if the deal doesn't go through—the U.S. has no trouble blocking transactions that don't suit its interests, and investment with China has largely been seen as a one-way street after all, as most foreign groups need to form local joint ventures and transfer IP to operate in the country.

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