Business Secretary Rees-Mogg ‘to reverse’ Newport Wafer Fab buyout

Jacob Rees-Mogg could be set to reverse a controversial Chinese-backed takeover of a British chip firm as he grapples with wider concerns about the hollowing out of industry.

The Government plans to order Dutch firm Nexperia – owned by China’s Wingtech – to reduce its stake in Newport Wafer Fab substantially, the Financial Times reported.

A decision from the Business Secretary is due by October 3 and the South Wales firm’s former owner is said to be orchestrating a bid, together with private equity group Palladian Investment Partners, to buy it back.

Former science minister George Freeman backed the intervention, saying: ‘The Government is right to take steps to restore Newport Wafer Fab.’

Also likely to be on Rees-Mogg’s agenda is whether to call in a takeover of London-listed software firm Aveva for closer scrutiny. 

France’s Schneider, which already holds a majority stake in the Cambridge-based firm, is closing in on a £9billion agreement to swallow up the rest of its stock.

Under takeover rules, Schneider must make a formal offer by a week today, having disclosed last month that it was exploring the move.

Aveva shares rose 3.1 per cent, or 91p, to 3050p yesterday as the deadline approached.

The deal could be subject to further scrutiny given Schneider’s joint venture with Chinese firm Delixi Group.

The decisions crystallise the delicate balance Rees-Mogg must strike between showing the UK is open for business and protecting key industries.

Nexperia, which previously held a 14 per cent stake in Newport Wafer Fab, took over the rest of the company last year in a £63million deal. 

The firm makes semiconductor ‘wafers’ which are then shipped to the Philippines and sliced up for use in products such as cars and smartphones.

Freeman, who opposes the takeover, said Newport Wafer Fab was the ‘jewel in the crown’ of a cluster of chip firms in South Wales.

‘If we are serious about becoming a science and technology superpower we can’t sit back and allow our top technology – with huge strategic geopolitical importance – to be bought out by hostile states engaged in economic war like Russia or China,’ he said.

The United States, meanwhile, is reportedly looking to broaden curbs on shipments to China of chips used for artificial intelligence, as well as chipmaking tools. 

Washington has already sent letters to big US chip companies Nvidia and Advanced Micro Devices instructing them to halt shipments of several AI chips to China unless they obtain licences.

Susannah Streeter, Hargreaves Lansdown’s senior investment and markets analyst, said there would ‘inevitably be cooperation with the US’ on chip technology. 

The Government declined to comment on the FT report. Nexperia declined to comment. The Mail has contacted Palladian for comment.