The deal was in process for over a month which has now taken the public limelight. Tsinghua’s acquisition of Linxens from private-equity group CVC is still pending regulatory clearance, three of the sources told Reuters, adding regulators in France, Germany and the company’s union need to approve the deal.
According to three sources, Tsinghua has already locked in a deal with four banks for a 1.5 billion euro (US$1.75 billion) bridge loan to fund the transaction. Credit Suisse, a main lender in the loan, also advised the seller, the people said.
So far this year, China has spent $45.5 billion on European assets, more than double year-ago levels, while its investments in the United States has dropped 75 per cent to $1.9 billion, according to Thomson Reuters data.
The authorities are not expected to object, the sources said on condition of anonymity as the information is confidential.
Failure to get local regulatory approval has previously scuttled Tsinghua’s offshore investment plans, such as share purchases totalling $2.6 billion from three Taiwanese chip makers – Powertech Technology Inc, ChipMOS Technologies Inc and Siliconware Precision Industries Co – that fell through in 2016 and 2017.
That followed a 2015 debacle when an informal $23 billion approach for US giant Micron Technology Inc was rejected by the Idaho-based chip maker amid national security concerns – a rationale that has increasingly been used to block Chinese deals in sensitive US industries.
Linxens, headquartered close to Paris, has 535 million euros in annual sales and employs 3,500 staff at nine production sites globally. It also has offices in China, Singapore and Thailand.