The Acquisition of Aritex

As part of our ongoing research into Chinese acquisitions in Europe, Datenna decided to highlight and research remarkable cases. This case considers the acquisition of the Spain-based company Aritex.

  • State-Owned Aviation Industry Corporation of China, jointly with Han’s Laser Technology Industry Group Co., Ltd., acquired 95% of the Spain-based Aritex in 2016.
  • The Chinese investor is active in and has links with the Chinese military sector.
  • Spain’s investment screening mechanism has just recently been reinforced through the issuing of the Royal Decree-Law 8/2020
  • Our FDI radar shows more notable acquisitions of Spanish companies, whereby the Spanish government could have enforce the Royal Decree

The Sale of the Spain-based Aritex


In April 2016, the State-Owned Aviation Industry Corporation of China (thereinafter AVIC) together with Han’s Laser Technology Industry Group Co., Ltd., acquired 95 % of the Spain-based Aritex.

Established in Badalona in 1961, Aritex is a leading company in the Spanish aeronautical sector, providing solutions for the development, manufacturing, installation, production and assembly lines of aeronautics and automobile manufacturers worldwide. The company can boast of relevant customers like Airbus, Boeing and Audi. After the acquisition, the board of directors of the company has been substituted with Chinese staff.

Aritex started with the supply of relevant components and products for the automotive sector and diversified to the aerospace sector in 2001. Besides that, the company is also engaged in the development of innovative systems for assembly processes and is active in the software intelligence field. Moreover, Aritex developed artificial 3D vision systems and customised open-source software to control robotic systems. Due to the sector Aritex is active in, and the scope of business, the Spanish company is an appealing target for a foreign company investing in Europe.


The Acquirer: The State-owned AVIC


Our data shows that the Chinese company has a registered capital of 8.3 billion euro and multiple investments in Aviation and high-tech companies throughout China. The company’s business scope description states the following: “support and services of military aircraft and engines, guided weapons, military gas turbines, weapon equipment supporting systems and products are included among the company’s main activities”.

As far as its ownership structure is concerned, the company is directly controlled by the State-owned Assets Supervision and Administration Commission of the State Council, the ad-hoc government agency that manages and detains the ownership of the state assets within China on the behalf of the State Council.

The other entity involved in the acquisition, namely Han’s Laser Technology Industry Group Co., Ltd., is a private company listed on the Shenzhen stock exchange and is the largest manufacturer of industrial laser processing equipment in Asia and the top three in the world. Even though the Chinese firms did not specifically acquire a company operating in the defense sector in Spain, due to AVIC’s business scope, Aritex’s innovative technologies and assembly systems could be applied in AVIC’s military activities in China.

The Spanish FDI Screening Framework

Given the importance of the industries into which both the acquirer and the target operate, concerns arise if, under the current Spanish foreign direct investment mechanism, a similar transaction would have been prevented or, at least, would have been subject to a closer scrutiny.

On 17 March 2020, the Spanish government issued the Royal Decree-Law 8/2020 through which the country’s investment screening mechanism has been substantially reinforced. The Decree mainly aimed at aligning Spanish regulations with the EU FDI screening framework which had been issued by the end of 2019.

Before that date, the Spanish government had a more liberal foreign direct investment (FDI) framework with restrictions only in the defense, energy, audio-visual and telecommunications sectors. In light of the corona crisis,  investment screening practices became tighter to better shield EU state members from strategic assets takeovers.

The regulation grants special powers to the government that can veto investments, whereby the acquirer would own 10% or more of the target equity or that provides the acquirer with controlling stakes in the company. These powers have been also extended to sectors such as critical infrastructure, critical technologies, dual-use goods and others. An important role is granted to the national Directorate-General for Investments within the Minister of Industry Trade and Tourism. The national Directorate-General will be entitled to examine suspect acquisitions which could threaten national public order, public safety, or public health.


Recent Acquisitions in Strategic Sectors


The Royal Decree has overhauled Spain’s investment screening regulation many times, which makes Spain’s investment screening mechanism one of the strictest frameworks within Europe. However, we are still able to notice relevant and recent acquisitions carried out by Chinese investors which are directly linked to the Chinese State Council. Eminent examples are the acquisition of the nuclear plant designer companies Empresarios Agrupados and Ghesa by China Energy Engineering Group Planning & Engineering and the takeover of Grupo Puentes by China Road and Bridge on the 26 of June 2020.

Both targets are companies operating in key industries; nuclear energy and the aviation industry. These industries can be deemed as sensitive due to the critical infrastructure involved and the innovative content of related manufacturing processes. Concerns are even more plausible if there are existing links between the acquirer and the state’s military sector as we notice in the acquisition at stake. Both transactions have not been blocked or labeled as subject to review by the Spanish government. With accurate and complete information of the acquirer at stake, national governments would be better equipped to perform risk assessments on foreign investors and ensure safe economic cooperation with China.