Berlin blocks Chinese acquisition of German high-tech satellite firm

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Berlin blocks Chinese acquisition of German high-tech satellite firm

As German high-tech company IMST was about to pass into Chinese hands, German Chancellor Angela Merkel blocked the deal for reasons of “public order and security”. EURACTIV Italy reports.

On the heels of the virtual NATO meeting that took place at the beginning of December, during which the Chinese advance towards the West was discussed, Germany’s military industry was at the heart of a conflict between Berlin and Beijing.

Chinese company Emst, which manufactures military communications systems, made a purchase request of German company IMST, which specialises in mobile and satellite communications technologies.

According to German tabloid newspaper Bild, the company would be a company specially founded by the Addsino Group within the China Aerospace Science and Technology Corporation, one of the public giants of the People’s Republic which would report directly to the Council of State under the leadership of Prime Minister Li Keqiang.

This was why the acquisition was blocked by Chancellor Merkel and Economy Minister Peter Altmaier.

IMST, which has extensive know-how in the field of satellite and radar communication, offers products ranging from radio modules to the 5G technology that is so important to China’s expansion plans into Europe.

Among its customers are the German armed forces, which need a key component developed by the company based in western Germany for their TerraSar-X satellite observation system.

Because of that reason, and other issues relating to Germany’s defence capabilities, Emst’s request for the purchase of IMST – with 165 employees and some €14 million in annual turnover – was seen as endangering “public order and security”, according to Germany’s government.

According to Bild, IMST has very close relations with the German Aerospace Centre and with the research ministry: since 2010, government contracts have enabled the company to achieve 40% of its turnover for a total of about €127 million.

“The BMBF (ed. Germany’s education and research ministry) funding is intended to strengthen Germany’s technological sovereignty and, if not prohibited, will eventually converge with China,” the German tabloid reported, citing certain sources from strictly confidential documents from Peter Altmaier’s ministry.

According to the German defence ministry, information of crucial importance for the armaments sector is at stake. This is because IMST has essential security know-how in the field of satellite communications, radar and radio technology.

Furthermore, the knowledge acquired for the development of future critical infrastructures in Germany, based on the 5G and 6G telephone networks, is also driving China’s interest in the company, according to Germany’s interior ministry.

China’s military rise, especially in the high-tech field, is a growing concern for the western world. The agenda of the meeting between the foreign ministers of NATO member states, which took place on 1 and 2 December, included the subject of the shift in world equilibrium caused by the rise of the Asian giant.

This is because China is no longer limited to strictly economic expansionism focused on the new geopolitical borders (the Arctic), it has embarked on large-scale military development that includes industrial acquisition operations such as the one attempted in Germany.

[Edited by Zoran Radosavljevic/Alexandra Brzozowski]

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