Chinese takeovers that are a worry

The Philips unit for sale is a leading producer of light-emitting diodes, which played a role in the move to block the Chinese purchase. The European Commission forced the Chinese to divest some of the purchased Syngenta assets to prevent dominating
US intelligence services allegedly tipped the Germans that chips produced by Aixtron could be used in China's nuclear programme. PHOTO: AIXTRON
The Philips unit for sale is a leading producer of light-emitting diodes, which played a role in the move to block the Chinese purchase. The European Commission forced the Chinese to divest some of the purchased Syngenta assets to prevent dominating
The Philips unit for sale is a leading producer of light-emitting diodes, which played a role in the move to block the Chinese purchase. PHOTO: REUTERS
The Philips unit for sale is a leading producer of light-emitting diodes, which played a role in the move to block the Chinese purchase. The European Commission forced the Chinese to divest some of the purchased Syngenta assets to prevent dominating
The European Commission forced the Chinese to divest some of the purchased Syngenta assets to prevent dominating European markets. PHOTO: REUTERS

Here are three examples of Chinese moves on European firms that led to raised eyebrows.

AIXTRON

Aixtron, a German maker of semiconductor-producing equipment which had been struggling in the market for chips because of heavy competition from Asia, leapt on an offer by Chinese firm Fujian Grand Chip Investment to pay €670 million (S$ 1.07 billion) for 65 per cent of the company's shares.

The only snag was that Aixtron also makes devices which produce crystalline layers used as semiconductors in weapons systems. The German government expressed its disquiet, but it was ultimately an otherwise obscure US government agency - the Committee on Foreign Investment - which quashed the Chinese purchase, after the United States intelligence services allegedly tipped the Germans that chips produced by Aixtron's equipment could be used in China's nuclear programme.

PHILIPS

Philips, a Dutch technology company and one of Europe's biggest, proposed to offload its lighting components business in a US$3.3 billion (S$4.5 billion) deal to a consortium involving Chinese buyers.

Yet again, the Dutch were powerless to act, but the Americans did because the Philips company in question traded in the US. The fact that the Philips enterprise up for sale is a leading producer of light-emitting diodes played a key role in the decision to refuse the Chinese-led purchase.

SYNGENTA

The acquisition of Syngenta, one of Europe's top biotechnology company, by ChemChina, a wholly owned enterprise of China's State Council, was allowed to go through in the largest foreign takeover in Chinese history.

The European Commission used its powers under competition rules to force the Chinese to divest themselves of some of the purchased assets to prevent dominating European markets. But China did acquire Syngenta's extensive and valuable research portfolio.

A version of this article appeared in the print edition of The Straits Times on August 17, 2017, with the headline 'Chinese takeovers that are a worry'. Print Edition | Subscribe