How National Security Concerns Can Impact a Global Transaction: President Obama Blocks Chinese Acquisition of a German-U.S. Business

On December 2, 2016, President Obama blocked a Chinese-owned German company, Grand Chip Investment GmbH (“Grand Chip”), from acquiring the U.S. business of German company Aixtron SE (Aixtron), a semiconductor equipment manufacturer with a U.S. subsidiary headquartered in Sunnyvale, California. According to a related Treasury Department press release, the national security risk posed by the proposed acquisition was, in part, “the military applications of the overall technical body of knowledge and experience of Aixtron . . . and the contribution of Aixtron’s U.S. business to that body of knowledge and experience.” The press release also noted that the acquisition was funded in part by a Chinese government-supported investment fund.

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