Defu Technology Kills Luxembourg Copper Foil Deal: What Went Wrong and What It Means

• Target Company: Luxembourg Copper Foil (100% Equity)
• The Issue: Restrictive conditions from Luxembourg Ministry of the Economy
• Result: Mutual termination of the acquisition
• Deposit Refund: €17,404,700 EUR (Full Refund)
• Business Impact: No adverse effect on production or financial standing

Defu Technology (Defu Keji 德福科技) just pulled the plug on a massive international acquisition — and it’s a perfect case study in how regulatory hurdles can derail even the most strategic corporate moves.

The company formally announced the termination of its planned acquisition of a 100% equity stake in Luxembourg Copper Foil.

What started as an ambitious international expansion play ended in a dead deal.

Let’s break down what happened, why it fell apart, and what this means for the company’s future.

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The Deal That Never Happened: Luxembourg Copper Foil Acquisition Fails

Defu Technology (Defu Keji 德福科技) was positioning itself for growth outside of China with a strategic acquisition play.

The target: a 100% equity stake in Luxembourg Copper Foil.

The goal: expand internationally and diversify their copper foil production capabilities.

But here’s the thing — regulatory barriers in Luxembourg threw a wrench in the entire operation.

Specifically, the Luxembourg Ministry of the Economy imposed additional restrictive conditions that made the deal impossible to execute under the original terms.

These weren’t minor compliance tweaks either.

They were significant enough that both Defu Technology and the counterparty couldn’t find a path forward.

The result?

Mutual agreement to terminate the acquisition entirely.

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The Financial Fallout: Deposit Refund and Capital Recovery

Here’s where the story gets interesting from a financial perspective.

Defu Technology had skin in the game with a contract security deposit of €17,404,700 EUR — equivalent to approximately ¥131,810,000 RMB ($18,340,000 USD) at current exchange rates.

That’s serious money.

The good news for shareholders?

The counterparty agreed to refund the entire deposit.

The timeline is tight too — the company expects the refund to be processed within 10 business days following the official termination.

This is actually a favorable outcome in a failed M&A scenario.

Many deals that collapse result in partial or even total loss of deposits.

The fact that Defu Technology negotiated a full refund speaks to either:

• Strong legal positioning on their side
• The regulatory issues being clearly the counterparty’s responsibility (or shared responsibility)
• A professional, amicable separation between both parties

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No Impact on Core Business Operations

Here’s another important detail for investors watching this situation closely.

Defu Technology emphasized that the termination will not adversely affect normal production, business operations, or overall financial condition.

Translation: this deal falling through isn’t a death knell for the company.

Their domestic copper foil operations continue as planned.

Revenue streams remain intact.

Cash flow from core business stays on track.

The acquisition was a growth play, not a lifeline.

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Why Luxembourg Regulatory Barriers Matter for Tech Companies

This deal falling apart due to Luxembourg regulatory restrictions isn’t just a Defu Technology story.

It’s a broader signal for any company looking to expand into Europe.

European regulators are increasingly scrutinizing foreign acquisitions, particularly in sensitive sectors like manufacturing and materials production.

Copper foil isn’t a commoditized, low-sensitivity material either.

It’s a critical component in:

• Battery production
• Electronics manufacturing
• Semiconductor packaging
• EV (electric vehicle) infrastructure

From a Luxembourg and broader EU perspective, there’s legitimate strategic interest in who controls production facilities for these materials.

That context helps explain why the Ministry of the Economy slapped additional restrictive conditions on this deal.

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Lessons for International M&A Strategy

If you’re involved in corporate development, venture, or private equity, here’s what this situation teaches us:

1. Regulatory due diligence needs to happen earlier and more thoroughly

Getting to a signed contract with a major deposit secured means the regulatory landscape should have been mapped out already.

2. Strategic sectors face higher scrutiny abroad

Materials, semiconductors, energy, and defense-adjacent industries will face tougher regulatory review in developed markets.

3. Deposit negotiation matters

Getting a full refund provision in your contract is crucial if regulatory risks exist.

4. Alternative markets might be easier

European regulatory barriers might push Chinese manufacturers to look at other international expansion opportunities — Southeast Asia, India, or the Middle East might offer clearer paths to growth.

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What’s Next for Defu Technology?

With €17.4 million heading back to their balance sheet, the company has options.

They could:

• Return capital to shareholders
• Invest in domestic capacity expansion
• Pursue acquisitions in less-regulated markets
• Fund R&D for next-generation copper foil products
• Pay down debt or strengthen cash reserves

For now, the company’s focus returns to optimizing operations in their core market and exploring alternative international expansion strategies that don’t face the same regulatory headwinds as Luxembourg.

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The copper foil deal is dead, but Defu Technology’s growth story isn’t over — it’s just taking a different route.

References

• Defu Technology: Termination of Acquisition of 100% Equity in Luxembourg Copper Foil – Yicai (第一财经)
• Official Website – Defu Technology (Defu Keji 德福科技)
• Stock Profile and Disclosures for 301511.SZ – East Money (Dongfang Caifu 东方财富)