Blackstone Strategic Partners invests in German infrastructure equipment supplier UET United Electronic Technology Group

Security and quantum cryptography – Will Huawei’s ban be effective soon?

Following Russia’s aggression against Ukraine and the subsequent increase in cyberattacks, the Western world is increasingly focused on security and progress. A significant aspect of this effort is network security to defend against third-party attacks. Trust in components from Asia is also declining sharply, potentially leading to a shift towards European or US components in the future. This could result in Huawei, as a network equipment provider, losing substantial market share. Relevant import bans are already being considered. Meanwhile, Taiwanese company TSMC has announced the construction of a chip factory in Germany, which could stabilize the supply chain for UET in the future.

UET United Electronic Technology Group (CFC.DE) manufactures components in Germany and is currently benefiting from the significantly decreased global semiconductor prices and high demand for their products. The company recently confirmed its turnaround and is on a growth trajectory. Currently, the company is in negotiations for a non-stock credit line from third parties.

Blackstone Strategic Partners (NYSE:BX) has already secured 23% of the company. Once their stake reaches 25%, they would also need to report and disclose this in Germany. There has been noticeable increased demand for the company’s shares in recent weeks. However, an acquisition of the publicly traded German company by Blackstone is also a possibility. Blackstone recently opened a new office in Frankfurt to expand their presence in Germany. They have already granted loans amounting to €5.6 billion in Germany and view themselves as a complement to German financial institutions, providing capital to medium-sized companies.

This would give Blackstone Strategic Partners control over a significant network equipment provider in Europe. Simultaneously, it would be an investment in the field of quantum technologies, as UET collaborates with a leading German university on 6G-QuaS networks. These networks are expected to be a milestone in network security and are supported by the German federal government.

This further demonstrates Blackstone’s keen analytical insights and the importance they place on medium-sized companies for their broad portfolio.