China's Fujian Grand Chip Investment Fund has withdrawn from the bidding race to acquire German chip equipment manufacturer Aixtron SE, after outgoing President Barack Obama imposed blockade over the deal last week.

Fujian's takeover vehicle Grand Chip Investment said on Thursday that its acquisition offer has lapsed after it failed to secure approval from the US regulatory body.   

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All those investors who had already accepted its takeover proposal will get their shares back by December 13, it added.

Aixtron stocks were trading 3.1 percent low at 3.78 euros ($4.02) by 11:27 GMT, much lower than the Grand Chip Investment's offer of 6 euros ($6.37) per share.

Obama blocked Fujian from acquiring Aixtron US reportedly due to national security concerns. Aixtron US, the division of German company based in Silicon Valley, is involved in critical military projects including upgrading of US and foreign-owned Patriot missile defense systems.

The overriding fear among American leaders that Chinese firm will get access to these military technologies eventually proved to be a crucial factor in blocking the Aixtron deal.

The US' acrimonious relation with China is largely considered responsible for its hostile attitude against Chinese investment. Most other western countries including Australia, Britain, Canada, and Germany share the same apprehension about Chinese investment.

China's traditional leaning towards communist ideology has forced most of the western world to view it with prism of suspicion. Experts also claim that China's unprecedented rise during last two decades has further increased the apprehension.       

Few days back, reports had emerged in the media that several American lawmakers have raised red flag over takeover of another chip making company by a private investment firm. The part of the funding of this investment firm reportedly comes from Chinese government.       

TagsFujian, Fujian Aixtron, Aixtron China, china, Barack Obama