Germany has withdrawn its approval of a Chinese company's bid to take over a German chip manufacturing company. The German economics ministry has subsequently reopened its review of the $728.89 million acquisition.

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On Monday, the German government decided to withdraw its clearance certificate for Grand Chip Investment GmbH's acquisition of Aixtron. Following the news, the market shares of Aixtron started to tumble, trading down 9.7 percent at $6 around 12:00 GMT.

On Sept. 8, German authorities had granted their approval for the deal to go through, stating that the government had no objections to the deal.

However, a sudden rise in takeovers by Chinese investors has created serious concerns within the German economics ministry. The German government will now consider whether it needs to increase its guard over the country's key technology companies.

According to statistics by data providers Dealogic, Chinese companies have been buying German brands at the rate of about one company a week since January. Data also showed that Chinese companies had spent around $11 billion on German companies this year - surpassing the previous record of $2.6 billion in 2014.

Although German economics ministry has withdrawn its support for the deal, according to law, the government can only veto a deal to a certain extent and not negate it completely. German authorities can only halt a takeover from a foreign investor if it poses a threat to public order or security. 

As Germany is becoming a top destination for Chinese investors, the German economics ministry has said it could only take further steps to ban unwanted investment if the European Union changes its rules on the free movement of capital to ensure equal competition with countries which are outside the trade bloc.