Aixtron will have to cut costs, jobs if U.S. blocks China deal

Fri Dec 2, 2016 12:25pm EST
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By Matthias Inverardi and Harro Ten Wolde

FRANKFURT (Reuters) - Aixtron (AIXGn.DE: Quote) will have to take action to balance income and costs, including potential job cuts, if U.S. President Barack Obama blocks its takeover by China's Fujian Grand Chip Investment Fund (FGC).

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.   Continued...

The logo of Aixtron SE is pictured on the roof of the German chip equipment maker's headquarters in Herzogenrath near the western German city of Aachen, October 25, 2016.  REUTERS/Wolfgang Rattay