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Obama blocks takeover of Germany’s Aixtron

WASHINGTON — Citing a national security risk, President Barack Obama on Friday blocked a Chinese investor’s proposed takeover of Aixtron SE, a German maker of semiconductor manufacturing equipment, a rare move that drew objections from Beijing and complaints that the U.S. was injecting politics into the deal. Obama ordered Fujan Grand Chip to “fully and permanently abandon” its proposed acquisition of Aixtron SE’s California-based subsidiary, Aixtron, Inc. The decision upheld a recommendation from the Committee on Foreign Investment in the U.S., which reviews foreign purchases of U.S. companies.

The decision threatens to jeopardize the larger deal, which is under scrutiny Berlin and is valued at $740 million.

In a statement issued Friday evening, the Treasury Department cited the president’s power to suspend or block acquisition where there is “credible evidence that the foreign interest exercising control might take action that threatens to impair national security.” Aixtron’s technology has “military applications,” the statement said. It is only the third time Washington has blocked a Chinese corporate takeover on security grounds.

China had appealed to Washington and Berlin to avoid injecting politics into the proposed takeover. “Since it’s a normal commercial activity, it will be carried out following the rule of markets and business. We hope the external parties will not over-interpret that or make any political intervention,” said foreign ministry spokesman Geng Shuang.

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