BEIJING (Reuters) - China’s commerce ministry has approved with conditions German liquid crystal maker Merck KGaA’s (MRCG.DE) planned $2.6 billion takeover of UK-listed AZ Electronic Materials AZEM.L.
Merck, the world’s largest maker of liquid crystals used in TVs and tablet and smartphone screens, agreed in December to buy peer AZ for $2.6 billion to expand its range of specialist chemicals for hi-tech gadgets.
The conditions include Merck having to report to the ministry any licensing deals it signs in China, and also prohibit Merck from forcing Chinese customers to buy products from both companies, the ministry said on Wednesday in a statement on its website.
Merck had said on April 18 that it had extended the offer period for the deal for a sixth time while it sought Chinese approval.
The new offer period is now 1200 GMT on May 2.
China is becoming increasingly influential in approving foreign takeover deals, as its fast-growing economy becomes an ever more important marketplace. It played a central role, for example, in the approval of Microsoft’s (MSFT.O) purchase of Nokia’s NOK1V.HE handset business.
AZ Electronic, which was originally part of German chemical company Hoechst AG, generates the bulk of its revenue in Asia.
Merck said on Wednesday it would update the market on Friday on its acquisition.
“We are very pleased that our constructive negotiations with MofCom (China’s ministry of commerce) have led to a clearance of our planned acquisition of AZ Electronic Materials. We will thoroughly review the decision and update the market as planned on May 2, 2014,” Merck said.
Reporting by Aileen Wang and Jonathan Standing; Additional Reporting by Marilyn Gerlach and Frank Siebelt in Frankfurt; Editing by Keiron Henderson and Mark Potter