In a move to reduce risks from economic ties with China, the German government has blocked the planned sale of Volkswagen’s subsidiary MAN Energy Solutions’ gas turbine division to a Chinese company. The decision was made by the German cabinet on Wednesday, according to two government sources.
The deal, which was first announced in June 2023 with an undisclosed price, would have seen the gas turbine division sold to CSIC Longjiang GH Gas Turbine Co (GHGT), a state-owned Chinese company. GHGT is a subsidiary of the China State Shipbuilding Corporation (CSSC), which dominates the Chinese shipbuilding industry.
The decision to block the sale comes as Germany and the European Union are working to reduce the risks associated with their economic ties with China. The German economy ministry has the authority to review and block transactions that are deemed to have implications for national security.
A spokesperson for MAN Energy Solutions declined to comment on the matter. However, one source familiar with the situation said that as a result of the blocked sale, MAN Energy Solutions will wind down its gas turbine development and production, while retaining its profitable turbine service business.
The move by the German government is part of a broader effort to protect critical technologies and industries from potential foreign influence or acquisition. It reflects the growing concerns within the EU about the risks posed by deepening economic ties with China, particularly in strategic sectors.