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

A State-Owned Defence Contractor

On July 31, 2015, an acquisition agreement was established between UK-based Delphi and 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. The unit was subsequently renamed Fuba (Germany) Automotive Electronics. Delphi has since been sold and renamed Aptiv.

The business scope of Northeast Industries Group includes the research and production of military mechanical and electrical products. Northeast Industries Group is 100% owned by the Norinco Group — a state-owned defence 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, Fuba is effectively under the control of the Chinese government. In line with this assessment, the US Pentagon listed Norinco as one of 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, developing 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 a product portfolio ranging from entry audio antennas to complex antennas with multiple services and future Car2Car applications. The company also has its own in-house testing and validation capabilities — including the only measurement field in Germany where 3D satellite technology can be measured and tested for real-life applications.

Car2Car technology has potential military applications in military drones and Unmanned Aerial Vehicles (UAVs). Via this acquisition, the Chinese government therefore acquired sensitive dual-use technology with direct defence implications.

Norinco and Acquisitions in Europe

Norinco has been involved in several further acquisitions in Germany and across Europe. In 2012, its subsidiary Henan North China Star Light Mechanical & Electrical acquired Kiekert AG. In 2015, its subsidiary North Lingyun Industrial acquired German company Waldaschaff Automotive GmbH. Both companies provide automotive technology. In 2016, another Delphi business unit — specialising in mechatronic projects — was acquired and renamed Merit Automotive Electronics Systems in Spain. In 2017, Norinco acquired the right to construct and operate an offshore wind power project in the Adriatic Sea off the coast of Croatia, acquiring a 76% stake in Croatian firm Energija Projekt for €30 million.