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There are no regulatory objections from the Dutch government to the takeover of Delft-based Dutch chip specialist Nowi Energy by China’s Nexperia. This was announced by outgoing Minister of Economic Affairs Micky Adriaansens in a parliamentary letter.

The takeover of the startup Nowi Energy by Nexperia had been the subject of controversy since late last year. The Delft-based company, which develops energy-efficient chips, was acquired by Nexperia, headquartered in the Dutch city of Nijmegen, in November 2022. Nexperia is a subsidiary of China’s Wingtech, which is partially state-owned.

The acquisition caused an uproar last year, as Nowi Energy’s technology could potentially be used for Chinese defense purposes. The company was therefore subjected to an investigation by Dutch authorities. This fits within the framework of the local Law on Security Test of Investments, Mergers and Acquisitions, which came into force this year and has a retroactive effect until September 2022.

No grounds in law

In her recent parliamentary letter, the outgoing Minister of the Interior and Kingdom Relations now indicates that the Investment, Merger and Acquisition Security Test Act does not provide sufficient grounds for further investigation into this particular acquisition. Thus, the government cannot investigate whether it poses a threat to national security.

More specifically, the outgoing minister indicated that for the tech sector, the retroactive effect of the law’s review is limited to companies developing so-called “dual-use” technology and/or military goods. Nowi’s products do not fall into this category, so the acquisition does not fall within the scope of the law’s retroactivity.

Keeping China happy

According to a comment in De Telegraaf, the Ministry’s decision can also be seen as a move to still be able to do business with China. This despite export restrictions imposed by the Netherlands, at the request of the US, on the export of high-end chip technology, such as ASML’s chip production machines.

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