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Germany’s government said Wednesday it has blocked the planned sale of the gas turbine business of Volkswagen’s (OTCPK:VWAGY) (OTCPK:VLKAF) MAN Energy Solutions unit to a Chinese company, citing security reasons.
The sale to Chinese state-owned CSIC Longjiang GH Gas Turbine Co., a subsidiary of China State Shipbuilding Corp., was announced in June 2023 at an undisclosed price.
CSIC Longjiang’s close ties to the Chinese military are the main reason why the German government rejected the deal.
MAN Energy said it will respect the government’s decision but does not share the view that its turbine technology could be used for military purposes.
The decision comes in an atmosphere of rising tensions between China and western countries, and Germany and the European Union are trying to reduce risks from economic ties with China.