U.S. warned Berlin on China-Aixtron deal: Handelsblatt

[October 26, 2016]  FRANKFURT/BERLIN (Reuters) - U.S. intelligence services warned Berlin that a now on-hold Chinese takeover of German semiconductor equipment maker Aixtron <AIXGn.DE> could give Beijing access to technology that could be used for military purposes, business daily Handelsblatt said.

The German economy ministry said on Monday it had withdrawn its approval for Fujian Grand Chip Investment Fund (FGC) to buy the Aachen-based firm for 670 million euros ($732 million), citing previously unknown security-related information.

The ministry declined to comment further in light of the Handelsblatt report on Wednesday.

Aixtron shares dropped 6.5 percent to a five-month low OF 4.83 euros by 0705 ET, well below the 6 euros per share that FGC had offered shareholders for their stock.

The newspaper, citing German intelligence sources, said U.S. authorities had shown representatives of German ministries evidence last Friday, at a meeting at the U.S. embassy in Berlin, although they refused to hand it over.

Concern is growing in Berlin about losing key technology to China after a string of Chinese acquisitions of German companies including flagship robot maker Kuka.

Aixtron sells its equipment, which is used to deposit chemical layers on silicon wafers, mainly to LED (light-emitting diode) chipmakers. It is not designed for military purposes but analysts say it could be adapted, with some difficulty.

The U.S. Committee on Foreign Investment in the United States (CFIUS), which reviews takeovers from a national security perspective, in January blocked a plan by Dutch Philips <PHG.AS> to sell its Lumileds LED business to Chinese buyers.

($1 = 0.9157 euros)

(Reporting by Georgina Prodhan and Caroline Copley; Editing by Maria Sheahan)

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