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Shares in the German semiconductor equipment maker fell more
than 5 percent on Friday following a report by Bloomberg, citing
sources, that said Obama was poised to block the deal.
An Aixtron spokesman said it had not received a ruling, but that
the deal would be called off if Obama formally blocked it.
Last month, the Committee on Foreign Investment in the United
States (CFIUS) recommended that Aixtron's sale to the Chinese
investment fund be stopped due to security concerns.
"After the decision in the U.S. management will have to put
their heads together. Costs and income need to be balanced
again," the spokesman said.
Loss-making Aixtron has said it would have to cut jobs and scale
down if the transaction fails. Aixtron had 713 employees at the
end of the third quarter, 5 percent less than a year ago.
Analysts consider Aixtron has a bleak future as a stand-alone
company as it struggles with market overcapacity.
Tim Wunderlich, analyst at German brokerage Hauck & Aufhaeuser,
said last month when it became clear the deal might be blocked
that Aixtron needed a white knight from Europe or the United
States to have a viable future.
The fall in Aixtron's shares took them below Grand Chip
Investment's offer price of 6.00 euros per share. The stock is
hovering around a nine-month low and was the biggest faller in
the STOXX Europe 600 Technology <.SX8P>, which was down 1.7
percent.
Other semiconductor companies in Europe were hit. ASML <ASML.AS>,
the second most valuable European tech stock, fell 2.4 percent.
The Dutch company had also come up against national security
hurdles with SIFIUS 15 years ago, but eventually succeeded in
buying U.S. based rival Silicon Valley Group.
Midcap European chipmakers, seen as possible M&A targets, were
also down, including Anglo-German Dialog Semiconductor <DLGS.DE>,
down 4.4 percent, Austria's AMS <AMS.S>, down 3.3 percent and BE
Semiconductor, down 2.6 percent.
But analysts and traders said a report that Apple Inc <AAPL.O>
was cutting orders for iPhone 7 components could also have put
pressure on Dialog and AMS shares.
Bigger chipmakers such as Germany's Infineon <IFXGn.DE> and
French-Italian STMicroelectronics <STM.PA> were only slightly
lower, shrugging off fears of an M&A slowdown following two
years of consolidation of the global semiconductor industry.
GALLIUM NITRIDE AND NANOTUBE
U.S. concerns over China gaining access to the production of
gallium nitride - a powdery yellow compound used in
light-emitting diodes (LED), radar, antennas and lasers which is
made using Aixtron-manufactured technology - was the main reason
for the U.S. block, security sources said.
Chinese Foreign Ministry spokesman Geng Shuang told reporters at
a regular briefing on Friday that the deal was "normal
commercial activity" and that China hoped the world would not
interfere politically.
CFIUS never gives reasons for its decisions. But sources have
previously told Reuters it blocked the $3.3 billion sale of
Philips' <PHG.AS> lighting business, Lumileds, to a consortium
of Chinese investors last January over gallium nitride concerns.
Another source told Reuters that Aixtron's nanotube technology
acquired through its 2007 acquisition of a Cambridge-based
company Nanoinstruments was a concern too. Their products also
have military applications.
The German Economy Ministry, which withdrew its approval for the
deal in October and is now doing its own review of the
transaction, said the German process was independent of the U.S.
scrutiny.
(Reporting by Matthias Inverardi and Harro ten Wolde; additional
reporting by Anneli Palmen in Duesseldorf, Eric Auchard in
Frankfurt, Greg Roumeliotis in New York and Michael Martina in
Beijing; editing by David Clarke and Jane Merriman)
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