Germany blocks the Chinese takeover of a satellite and radar technology firm IMST by a subsidiary of state-controlled missile maker, China Aerospace and Industry Group (CASIC). The government document revealed that security concerns are the reason behind it.
The past decade has been a joy ride for Germany and China in terms of trade. However, the two countries are at loggerhead now due to the unfair competition caused by the state-backed enterprises mostly regarding market access.
The government document accessed by Reuters said that IMST is an important provider of satellite communication, radar, and radio technology. This is also important for national security. IMST expertise is also required for critical infrastructure including 5G and 6G networks.
Germany blocks the Chinese takeover
“IMST is also an important partner of the German Aerospace Center (DLR). In various cases, IMST’s products and services were also the subject of deliveries to the Bundeswehr armed forces.”
Reuters reported that a spokesperson of the German Economy Ministry said that the cabinet had authorized the ministry to closed door meeting to block foreign investment by a non-European Company.
Chinese Ministry on the other hand denied any knowledge of it and said that they encourage the state-owned/state-backed companies for mutually beneficial cooperation overseas.
The ministry further added,
“We hope that countries including Germany will provide Chinese companies that are operating normally with a fair, open, and non-discriminatory market environment, and not politicize normal economic and trade cooperation, (or) use ‘national security’ as a pretext to engage in protectionism.”
No response has been heard from IMST or CASIC.
Germany has already taken some actions to fend off non-European companies from unwanted takeovers especially from State-owned Chinese companies. New rules have been imposed.
The new law says that Berlin has the right to intervene in case a non-European Company buys a 10% stake in a German company, it was 25% before.
In the past, the German Government foiled many Chinese deals or takeover attempts as well.