LUXEMBOURG – Chinese copper-foil manufacturer Jiujiang Defu Technology has terminated its planned acquisition of Circuit Foil Luxembourg after the Luxembourg Ministry of the Economy imposed conditions that would have prevented Defu from gaining operational control of the business.

The deal, announced in July, would have seen Defu acquire Circuit Foil Luxembourg for approximately $190 million. However, Defu said regulators would only approve a minority ownership position with limited voting rights and no veto power over management decisions. The restrictions also extended to corporate governance, intellectual property, trade secrets and other strategically sensitive areas.

Circuit Foil Luxembourg is Europe’s last producer of ultra-smooth copper foil, a critical material used in advanced printed circuits and increasingly important for artificial intelligence infrastructure and semiconductor supply chains. Because of its strategic importance, the transaction was subject to Luxembourg and European Union foreign investment screening rules.

A spokesperson for the Ministry of the Economy confirmed that a conditional authorization was issued on January 8 under those rules. According to the ministry, Defu determined that the conditions fundamentally altered the nature of the transaction and opted to terminate the agreement. The ministry declined to provide further details, citing confidentiality provisions related to critical industries.

Following the failed acquisition, Defu said it will redirect its expansion efforts domestically. The company announced plans to pursue a 51% stake in Huiru Technology, a Chinese manufacturer of high-performance electrolytic copper foil with annual capacity of 20,000 tonnes. Pricing for the Huiru transaction will be determined after due diligence is completed.