Norinco’s acquisition of Fuba: Chinese defense conglomerates acquiring European technology
At Datenna, our China experts continuously track and conduct detailed investigations into the acquisitions of European and US firms by Chinese entities. Through a series of articles in our resource library, we highlight striking acquisition case studies, analysed based on Datenna’s in-depth, unique data on China’s techno-economic landscape. This article elaborates on the acquisition of Fuba Germany by the Chinese Northeast Industries Group.
Short read
- German company Delphi’s Advanced Reception Systems was sold to Northeast Industries Group and renamed Fuba Germany in July 2015.
- Key technology for connected cars are 4G, GPS and car-to-car communication.
- The investor is owned by Norinco – a Chinese state-owned defense contractor worldwide.
A state-owned defense contractor
On July 31st, 2015, an acquisition agreement was established between the UK-based Delphi, and the China-based Northeast Industries Group. Both parties agreed on the sale of Delphi’s German reception business unit “Reception System”. The transaction size was not disclosed. As such, the unit was renamed to “Fuba (Germany) Automotive Electronics.” Delphi has since been sold and renamed to “Aptiv.”
The business scope of Northeast Industries Group includes (among others) research and production of military mechanical and electrical products. Northeast Industries Group is 100% owned by the Norinco Group, a state-owned defense contractor that considers itself the backbone of the Chinese army’s mechanical, information technology, and intelligent equipment development. Norinco is directly owned by the State-owned Assets Supervision and Administration Commission of the State Council. Based on this ownership structure, it can be argued that Delphi’s former unit Fuba is under the control of the Chinese government. In line with this, the US Pentagon listed Norinco as one of the 20 Chinese companies owned or controlled by the Chinese military in 2020.
What does Fuba Automotive Electronics do?
Fuba has 50 years of experience in automotive communication, and develops antennas and receivers for audio and tv broadcasting, 4G connectivity, GPS and car-to-car communication.
With an accumulation of over 450 patents, Fuba has established an entire product portfolio ranging from entry audio antennas up to complex antennas with multiple services and future Car2Car applications. The company also has its own in-house testing and validation capabilities. Unique in the industry, Fuba has the only measurement field in Germany where 3D satellite technology can be measured and tested for real life applications. Such Car2Car technology has potential military applications in military drones and Unmanned Aerial Vehicles. Therefore, via this acquisition the Chinese government acquired sensitive dual-purpose technology.
Norinco and acquisitions in Europe
Norinco has been involved in more acquisitions in Germany. In 2012, their subsidiary Henan North China Star Light Mechanical & Electrical acquired Kiekert AG. Later, in 2015 their subsidiary North Lingyun Industrial acquired the German company Waldaschaff Automotive GmbH. Both companies provide automotive technology. In 2016, another business unit of Delphi, specializing in mechatronic projects, was acquired and renamed to Merit Automotive Electronics Systems (Spain). Then, in 2017, Norinco acquired the right to construct and operate an off-shore wind power project in the Adriatic Sea of the coast of Croatia. With this deal it acquired a 76% stake in the Croatian firm Energija Projekt for 30 million euro.