Written by Giuseppe Fonte for REUTERS – Italy has prevented Chinese company Shenzhen Investment Holdings Co from buying a controlling stake in a Milan-based firm producing semiconductor equipment, two Italian government officials said, signalling a renewed commitment to shield strategic assets from foreign takeovers.
The two government officials told Reuters that a cabinet meeting on March 31 used its special vetting powers to block Shenzhen from buying a 70% stake in LPE, which produces components for power electronics applications.
Prime Minister Mario Draghi, speaking to reporters late on Thursday, said: “There was a case recently in which the government looked into … an Italian semiconductor company which was to be acquired by a Chinese company. It was blocked.”
Draghi did not name the companies involved.
“The shortage of semiconductors forced many automotive manufacturers to slow down production last year. This is a sector deemed of strategic importance,” Draghi said.
Rome notified the parties of the decision this week, one of the sources said, adding that Shenzhen Investment Holdings was a Chinese government-affiliated company.
LPE and Shenzhen were not immediately available for comment.
A global semiconductor chip shortage has caused a major delay in manufacturing, with automakers cutting production and electronic device makers struggling to keep up with a pandemic-led surge in demand for phones, TVs and gaming consoles.
The automotive industry accounts for more than 6% of Italy’s gross domestic product, with almost 300,000 employees, based on data provided by sector lobby ANFIA.
Italy has so far used its so-called “golden powers” three times since 2012 to block unwanted foreign interest in key industries.
Under previous Prime Minister Giuseppe Conte, in October 2020 Rome prevented telecoms group Fastweb from signing a deal with Huawei to supply equipment for its 5G core network.
Golden powers currently apply to the financial, credit, insurance, energy, transport, water, health, food safety, robotics, semiconductors and cybersecurity sectors.
Industry Minister Giancarlo Giorgetti said on Thursday the government was considering extending such powers to some supply chains in the automotive and steel sectors.
Giorgetti last month said the government would start an enquiry should vehicle maker CNH Industrial decide to sell its truck unit Iveco to China’s FAW.
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