French semiconductor company Linxens indirectly acquired by Chinese Ministry of Education

At Datenna, our China experts continuously track and conduct detailed investigations into the acquisitions of European and US firms by Chinese entities. Through a series of articles in our resource library, we highlight striking acquisition case studies, analysed based on Datenna's in-depth, unique data on China's techno-economic landscape. This article elaborates on the acquisition of Linxens, a semiconductor manufacturer in France.

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What Does Linxens Do?

Headquartered in France and founded in 1979, Linxens is a world market leader in R&D, design, and manufacturing of micro-connectors, and the largest producer worldwide of smartcard devices, with over 3,500 employees. Its products are used across a wide range of applications by smartcard manufacturers and chipmakers. Linxens makes the connectors crucial for communication between smart cards and electronic readers, supporting applications such as contactless payment, transport passes, and building access. The company offers a complete range of RFID inlays and antennas, as well as packaging and testing — serving as a leading technology provider for 80% of the world's population across sectors including telecommunications, finance, transportation, hotels, e-governance, and the Internet of Things.

New Factory in China

In September 2019 — one year after the acquisition — Linxens announced the construction of a major factory and research centre in Tianjin, China. The construction plan required an investment of approximately 2.1 billion RMB (€260 million) to establish the company's largest production facility worldwide, utilising its global R&D expertise and industry knowledge. The new facility is set to be a key component of Unigroup's chip and cloud production base in Tianjin, which will include Unicloud's headquarters, Linxens' plant, and an incubation centre for Tsinghua Unigroup's chip and cloud businesses.

The Sale of Linxens

In 2015, Linxens was sold to CVC Capital Partners, a private equity investor. In 2018 it was subsequently sold to Ziguang Liansheng, which acquired the shares for a total of €2.2 billion. Ziguang Liansheng was originally established in May 2018 with the specific purpose of acquiring Linxens, and is ultimately controlled by Tsinghua University.

Ziguang Liansheng as Part of Tsinghua Unigroup

Ziguang Liansheng has five shareholders. The largest — Tibet Ziguang Shicang Investment — holds 75% of the shares and is ultimately owned by Tsinghua University via Beijing Ziguang Capital Management, Ziguang Capital, and Tsinghua Holdings. The ultimate controller of Tsinghua University is China's Ministry of Education.

The remaining four shareholders hold smaller stakes: Zijin Haikuo (8.3%), Zijin Haiyue (8.3%), Hongfeng Capital (5.6%), and Xinhua Equity Investment (2.8%). The controlling shareholder of Zijin Haikuo and Zijin Haiyue is Weitao Electronics, majority owned by Beijing Jiankun Investment Group — also the second-largest shareholder (49%) in Ziguang Group. Beijing Jiankun is 70% owned by Zhao Weiguo, who is simultaneously chief executive of Tsinghua Holdings and legal representative of Ziguang Group.

Hongfeng Capital is owned by Oceanwide Investment and ultimately controlled by three individuals. Xinhua Equity Investment is owned by Suzhou Industrial Park (SIP) Asset Management, whose largest shareholder (49.5%) is Xinxin Financial Leasing — a company operating under the direction of the state-owned National IC Fund (the Big Fund), which aims to spur domestic chip development and has previously been involved in several semiconductor acquisitions in Europe, including Anteryon in the Netherlands. Notably, the second shareholder in SIP Asset Management (49%) is again controlled by the Ziguang Group.

This complex, overlapping shareholder structure is indicative of hidden state influence — characteristic of Chinese corporate governance — used to exert state ambitions into private markets.

Decision Centre: Europe or China?

When Linxens was acquired by Chinese investors, the primary concern of employees was job security. Further concerns arose after the launch of the new Tianjin facility, as Chinese state-controlled investors appeared to be increasing their influence in the company. President and CEO Christophe Duverne stated at the time that Linxens would remain an autonomous company with decision-making based in Europe.

To reduce the risk of public concern influencing the deal, it was kept silent for over a month after signing while awaiting regulatory approval. French finance minister Bruno Le Maire had previously stated that his government was happy to accept long-term investment from China, as long as French assets were not "looted." French regulators ultimately allowed the Linxens bid to proceed on the grounds that the company makes the "passive", non-strategic components of chips, not fully assembled semiconductors. The US CFIUS framework did not have the opportunity to block the acquisition, as the group's US operations were excluded from the takeover.

"We are moving from a financial shareholder to an industrial shareholder, present in particular in semiconductors and network equipment. We remain an autonomous company with our decision-making based in Europe."— Christophe Duverne, President and CEO (Interview, L'Usine Nouvelle)