Netherlands is planning to launch an investigation into the acquisition of Nowi, a local chipmaker, by Chinese-owned Nexperia, reported Bloomberg.

The Dutch government’s Economic Affairs Minister Micky Adriaansens said using the new law authorities will review Nexperia’s acquisition of Nowi.

Called The Investments, Mergers and Acquisitions Security Test Act, the law will allow the country to block a deal or limit the size of investments citing national security reasons.

“At the moment, Russia and China” are among the nations that the Netherlands needs to be “extra alert” about, Adriaansens told the publication in an interview.

There are numerous areas where Dutch entities can do business with China, in some areas “we are really vulnerable,” the minister added.

One of the Netherlands’ largest commercial partners, China has been the subject of some reconsideration.

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By GlobalData

The Dutch government decided to support the US initiative to further stifle chip technology exports to China earlier this year.

According to Adriaansens, there is a chance that sensitive technologies, such as photonics, quantum, radar, sensor, and chip technology, could be used for military purposes.

“That knowledge we have to protect,” the minister said, adding that the Netherlands will also investigate a “handful” of other acquisitions retroactively.

In November 2022, Nexperia bought Nowi, which specialises in developing chips for energy harvesting.

Meanwhile, China’s Wingtech Technology acquired a controlling stake in Nijmegen-based Nexperia in 2019 in a deal valued at 25.2bn yuan ($3.6bn).

The new legislation would not allow the government to investigate Wingtech’s acquisition of Nexperia as the new law will cover deals that happened since September 2020.