The Germans prevented China from buying a company that also specializes in 5G

The Germans prevented China from buying a company that also specializes in 5G

The German government has prevented a Chinese military defense company from buying a German company specializing in satellite and radio technology, including 5G. The reason is national and security risks. The German media reported about it.

The sale was stopped by the government

North Rhine-Westphalia-based IMST is an acquisition target of Addsino, a subsidiary of China Aerospace Science and Industry Corporation, a manufacturer of military communications systems, said the German agency DPA, citing a government document. The Ministry of Economy confirmed that the cabinet of Chancellor Angela Merkel on Wednesday (December 2) approved the blocking of the acquisition by a company from abroad, but did not state the specific names of the companies. "The criterion for review is always the threat posed by a specific acquisition to public order or security in Germany," the ministry said in a statement. Following the increase in acquisitions of German companies by Chinese companies that use German know-how, the Merkel government is trying to tighten supervision over the takeover of strategic companies by companies from countries outside the European Union (EU).

Security risk

The government in Berlin can currently control the purchase of shares at 25% or more, but has already drafted a bill that will push this limit to 10%. Referring to a government document blocking the latest acquisition attempt, the DPA said it posed "real and serious risks." IMST has developed a key component for the TerraSAR-X Earth observation satellite, the data of which are used by the German Ministry of Defense to produce three-dimensional models used for simulation or in weapon systems. "Without the ban, this knowledge would flow into China and contribute to its armaments," the document said. IMST is also involved in the development of 5G technology, and Berlin would not consider it a reliable partner if it came under the control of a Chinese defense company.