FRANKFURT/BERLIN (Reuters) - U.S. intelligence services told Germany that a proposed Chinese takeover of semiconductor manufacturing equipment maker Aixtron (AIXGn.DE) could give Beijing access to technology that could be used for military purposes, the Handelsblatt newspaper said on Wednesday.
The German economy ministry said on Monday that pending a review it had withdrawn its approval for Fujian Grand Chip Investment Fund (FGC) to buy the Aachen-based firm for 670 million euros ($732 million), citing previously unknown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 following the Handelsblatt report and said it could give no details on the "origin or the nature" of the information that led to clearance being withdrawn.
A spokeswoman added the review of the deal would likely take between two and three months once the ministry had collected all relevant documentation.
Aixtron said it had so far not received any questions from the ministry related to the review.
Aixtron shares dropped 7.3 percent to trade at a five-month low of 4.79 euros by 1011 ET, well below the 6 euros per share that FGC had offered shareholders for their stock.
Handelsblatt, 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 the evidence over.
Concern is growing in Berlin about losing technology to China after a string of Chinese acquisitions of German companies including industrial robots maker Kuka (KU2G.DE).
Aixtron sells its equipment, which is used to deposit chemical layers on silicon wafers, mainly to makers of LED (light-emitting diode) chips. It is not designed for military purposes but analysts say it could be adapted, with some difficulty.
"Aixtron is not involved in the design, development, or production of its customers’ semiconductor devices," the group said, adding it had sold several hundred systems to China over the past 30 years in deals cleared by the German authorities.
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 company 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, Greg Mahlich