(Yicai Global) Oct. 28 -- Shares of Sai MicroElectronics gave back some of their earlier gains after the Chinese semiconductor company said it has not yet been approved to acquire Elmos Semiconductor's automotive chip production assets in Germany despite a bullish news report.

Sai's stock price [SHE: 300456] closed 2.3 percent up at CNY15.07 (USD2.10) after surging by 9.5 percent intraday. The shares are still almost 40 percent down this year.

The Chinese company has not received a decision from Germany's Federal Ministry for Economic Affairs and Climate Action about the planned purchase in Dortmund through its Swedish unit, the Beijing-based firm said in a statement today.

German business newspaper Handelsblatt reported yesterday that the transaction is soon to be approved by local regulators.

Sai signed an agreement about the acquisition in December and filed a foreign direct investment application in January, based on information Sai released yesterday. The firm has had four or five rounds of communications with the ministry but the Covid-19 pandemic has affected the efficiency of talks to a certain extent, it said.

The review may take longer than expected, Sai said, adding that the German government is still reviewing the acquisition, and it is uncertain if or when it can be approved.

Sai has become increasingly reliant on its European business as in the first three quarters, Swedish production lines made up 90 percent of the firm's revenue coming from its core business of microelectromechanical systems, according to data revealed yesterday. The parent earned CNY555 million (USD76.6 million) in total revenue, down 13 percent from a year ago, while its net profit plunged by 98 percent to CNY1.6 million (USD220.9 million).

Editor: Emmi Laine, Xiao Yi