Germany's government is set to block a bid by Chinese investors to take over engineering company Leifeld Metal Spinning AG, the Financial Times reported July 26, citing German media.

The government is blocking the acquisition of Leifeld, a machine tool manufacturer, by Yantai Taihai Corp., WirtschaftsWoche reported.

Ministers said the acquisition would "endanger public order and security in Germany," reported the DPA news agency. Leifeld specializes in high-strength materials used in aerospace and the nuclear industry.

In 2017 Germany tightened its laws on foreign acquisitions of companies operating in "critical infrastructure." The new law expanded the investigation of takeovers to include "indirect acquisitions" where foreign investors use EU-based corporate vehicles to take over German companies.

This marks the first time Germany will use the new law to reject a foreign investor's acquisition bid, the FT said.

Chinese acquisitions in the German high-tech sector peaked in 2016 with the €4.5 billion acquisition of Kuka, the country's largest maker of industrial robotics, by Chinese appliance maker Midea.

A spokeswoman for the German economics ministry declined to comment on individual cases while Leifeld could not be reached for comment, the FT said.