Dutch-owned Nexperia BV's acquisition of chipmaker Nowi Energy BV has received approval from the Dutch government, despite being under scrutiny on national security grounds, according to anonymous sources familiar with the matter. The Netherlands determined that Nowi's technology does not pose a threat to national security as it is not dual-use. This decision indicates that the Netherlands remains open to conducting business with China, despite the recent export control measures led by the United States.
Earlier this year, Dutch authorities initiated an investigation into Nexperia's acquisition of Nowi using newly enacted legislation that grants the government the authority to halt foreign takeovers of Dutch companies if national security concerns are involved. Nexperia, which specializes in semiconductors, acquired Nowi, a producer of small chips for energy harvesting, in November 2022. In 2018, Wingtech Technology Co. purchased Nexperia for $3.5 billion, and with it came the Dutch chipmaker.
While the Dutch government has been reviewing its ties with China, one of its significant trading partners, it recently agreed to join the US-led efforts to further restrict the export of chip technology to China. Dutch Economic Affairs Minister, Micky Adriaansens, emphasized the need for caution when dealing with countries like Russia and China. Adriaansens pointed out multiple vulnerable areas, including photonics, quantum technology, radar technology, sensor technology, and chips. Despite these vulnerabilities, there are still numerous industries where Dutch firms can conduct business with China.
Wingtech gained control of Nexperia by consolidating various ownership stakes in the company, which had been separated from NXP Semiconductors NV and acquired by a consortium of Chinese investors. However, last year, the UK government ordered Wingtech to reverse its acquisition of Britain's largest microchip factory due to national security concerns, more than a year after the deal was concluded.
The Investments, Mergers, and Acquisitions Security Test Act, enacted in the Netherlands, allows the government to limit the size of investments or block deals based on national security considerations. The legislation covers takeovers that occurred from September 2020 onwards, but it cannot retroactively investigate Nexperia's acquisition by Wingtech. The Dutch Economic Affairs Ministry has not commented on the matter yet but plans to make an official announcement later today.