Chinese takeover of £63m chip factory stalled with security law
A security review of the Chinese-backed takeover of Britain’s biggest microchip plant has been delayed until next year. Sources close to the GBP63m takeover of the Newport Wafer Fab by Wingtech-owned Nexperia said that a review ordered by Boris Johnson was unlikely to be reported before the new year. Nexperia, based in Amsterdam but owned by the Shanghai listed Wingtech, acquired the largest chip making facility in the summer.
In August, Wingtech warned shareholders in a Chinese filing that “domestic and foreign industry policies” may jeopardise the takeover of Newport Wafer Fab later in the year. Fast-forward to November and the review has been postponed, and is likely to fall within the purview of the new National Security and Investment Act. The new law will the expand the scope of review by the government for takeovers and will also be applied retrospectively, meaning ministers could unwind any potential Newport deal regardless if it is deemed a risk.
It will mean the Business Secretary, Kwasi Kwarteng, will be granted expanded powers to intervene in foreign takeovers considered a national security risk.
Considering the deal under the new legislation could be a test case of how far the Government is prepared to intervene in foreign takeovers.
Whilst the US has been stern on Chinese tech, with Huawei and most recently China Telecoms, the UK appears to be more diplomatic with their approach, especially in the context of a post-Brexit landscape.