The stock exchange deadline for this ended at midnight on Tuesday night without the Federal Ministry for Economic Affairs and Climate Protection having granted the necessary approval. According to the ministry, there was not enough time for this.
“By the end of this period, not all the necessary review steps could be completed as part of the investment review,” explained a ministry spokeswoman. “This applies in particular to the examination of the antitrust approval by the Chinese authorities, which was only granted last week.” GlobalWafers reacted with disappointment.
The Federal Ministry of Economics had been examining the takeover for about a year. But the Chinese competition authority only recently, on January 21, granted approval for the transaction worth almost 4.4 billion euros. The authority imposed conditions: According to this, GlobalWafers had to sell its business involving the so-called zone drawing process – a manufacturing variant for silicon wafers – within six months. In addition, the group should continue to supply Chinese customers. The Ministry should have examined these conditions more closely.
A so-called foreign trade clearance certificate in Germany would have been required for the takeover. The Federal Ministry of Economics examines whether foreign investments in domestic companies are likely to adversely affect public order or security in the Federal Republic.
This means that the takeover attempt has failed for the time being. The test procedure became legally irrelevant when the deadline expired, the spokeswoman for the ministry said. “Should the company make a fresh start for a new acquisition, then the investment review will of course be carried out again.” “This result is very disappointing given our efforts to find a mutually acceptable solution and our long and successful history in Europe,” said GlobalWafers CEO Doris Hsu, according to a company press release.
“We will of course continue to work closely with our European clients, many of whom have supported the proposed transaction. We will analyze the German government’s non-decision and assess its impact on our future investment strategy.” According to its own information, GlobalWafers intends to provide information on the alternative use of the funds earmarked for the transaction on Sunday.
The Foreign Trade Ordinance, which was tightened last year, forms the basis for the Ministry’s examination procedures. Since then there have been new reporting requirements for investments in high and future technology sectors. These include, for example, the areas of artificial intelligence, autonomous driving, robotics, semiconductors, cyber security, aerospace and nuclear technology. According to information from ministry circles, the number of investment reviews has been increasing for years. Accordingly, there were 306 such procedures last year, after 160 in 2020, 106 in 2019 and 78 in 2018.
Government and opposition representatives welcomed the lack of approval. According to his own statements, the Vice-Chairman of the Economic Committee, Hannes Walter (SPD), is behind the decision. “We do not gain technological sovereignty by selling our silverware,” Walter told the “Handelsblatt” (Tuesday). The economic policy spokeswoman for the Union faction, Julia Klckner, told the newspaper: “Germany is an attractive investment location. That’s why it’s right that we also keep our security interests in mind.”
Munich-based Siltronic is one of the leading manufacturers of silicon discs (wafers) for semiconductors and chips. The board of directors and the supervisory board welcomed the takeover offer. The last hurdle would have been the declaration of no objection from the Federal Ministry of Economics. Siltronic employs around 4,000 people and produces in Freiberg, Saxony, among other places. The largest plant is in Singapore.
According to its own statements, GlobalWafers is the largest wafer supplier in Europe. CEO Doris Hsu recently stated that her company had offered far-reaching safeguards. “That alone clearly shows that we are not a foreign buyer of key technologies, but – like Taiwan – a strong partner for the European semiconductor industry.” If the takeover fails, GlobalWafers would pursue other investment plans outside of Europe, she had announced.
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