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A Chinese copper-foil manufacturer experienced a decline in its stock value after abandoning a planned takeover of Circuit Foil Luxembourg, citing strict conditions imposed by the Luxembourg government. Instead, the company announced plans to pursue a similar acquisition within China.
The stock closed down 9.1% at CNY32.26 (approximately USD4.63) per share in Shenzhen today, having earlier fallen as much as 12.4%.
According to a notice from Luxembourg’s Ministry of Economy on January 9, the company would have been permitted to acquire only a minority stake in Circuit Foil Luxembourg, with limited voting rights and no authority over management decisions. The Jiangxi-based firm revealed this information yesterday.
The notice also detailed a series of restrictions regarding corporate governance, intellectual property, trade secrets, and other critical business issues related to Circuit Foil Luxembourg. Due to these restrictions, the company and the Luxembourg-based owner of Circuit Foil, Volta Energy Solutions, agreed to cancel the acquisition deal. The seller is expected to return the EUR17.4 million (around USD20.3 million) deposit in full.
Last July, the company signed an agreement to acquire all shares of Circuit Foil Luxembourg for EUR174 million (about USD200 million). Circuit Foil Luxembourg is known as a leading manufacturer of premium copper foil, with an annual capacity of 16,800 tons.
Its products are used in infrastructure for data centers, including artificial intelligence servers, 5G base stations, and mobile devices. The company operates primarily in Luxembourg, with additional product slitting facilities in China and Canada.
In a separate statement yesterday, the company announced plans to acquire a 51% stake in Huiru Technology, a Chinese firm specializing in high-performance electrolytic copper foil. Huiru manufactures and sells 20,000 tons of copper foil annually. The purchase price will be determined after due diligence is completed, the company noted.
The high demand for its products has nearly saturated the company’s capacity, and this new acquisition is expected to significantly boost production, helping the company better meet customer needs.
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