The German government blocked COSCO Shipping (SHA:601919, HKG:1919) from acquiring an 80% stake in logistics company Konrad Zippel Spediteur due to security concerns, the Federal Ministry for Economic Affairs and Climate Action said Wednesday.

In an emailed statement to MT Newswires, a spokesperson for the ministry said the takeover would increase reliance on China and jeopardize supply chains across Germany and the wider European Union.

Zippel CEO Axel Plass said the company's operations will continue despite the authorities' decision, adding that they "would have preferred a different outcome," Reuters reported.

The German antitrust regulator approved the deal in February.

COSCO did not immediately respond to MT Newswires' request for comment.

COSCO's Hong Kong-listed shares jumped nearly 4% in recent trade, while its Shanghai-listed shares were up almost 2%.