China International Development Eyes Semiconductor Deal
- Leather goods maker considers HK$9 billion acquisition
China International Development Corp announced plans to explore the acquisition of Lonten Semiconductor Co Ltd in a deal valued at up to HK$9 billion ($1.16 billion). An agreement has been signed with Lonten’s chairman and largest shareholder, Xu Xichang, who holds a 24.81% stake. Xu will work with other shareholders to facilitate the potential buyout. The proposed transaction is expected to range between HK$4.5 billion and HK$9 billion, financed through cash, share issuance, or a mix of both.
Agreement and Exclusivity Period
As part of the agreement, China International Development has secured a three-month exclusivity period. During this time, the company will review Lonten Semiconductor’s records and assess its operations. Lonten specializes in power semiconductor devices, a sector critical to electronics and automotive industries. The exclusivity arrangement gives China International Development priority in negotiations before other bidders can enter.
The deal reflects a strategic shift for the leather goods maker. While traditionally focused on fashion products, the company has diversified into automobiles. Expansion into semiconductors marks another step toward broadening its portfolio. Executives see the move as a way to align with China’s growing emphasis on domestic technology development.
Strategic Diversification
China International Development’s interest in semiconductors highlights the importance of the industry in national economic planning. Semiconductors are vital for modern electronics, renewable energy systems, and electric vehicles. By acquiring Lonten, the company could gain a foothold in a sector with strong growth potential. Diversification may also help mitigate risks associated with reliance on consumer goods.
The company’s involvement in the automobile segment provides a natural link to semiconductor applications. Power devices are essential for electric vehicles and advanced automotive systems. Integrating semiconductor capabilities could strengthen its competitiveness in both consumer and industrial markets. The acquisition would represent a significant transformation of its business model.
Broader Industry Context
China has been encouraging domestic firms to invest in semiconductor production to reduce dependence on foreign suppliers. Western restrictions on technology exports have intensified the push for local innovation. Companies outside the traditional tech sector, such as China International Development, are now exploring opportunities in this field. The potential acquisition of Lonten reflects this broader trend.
Lonten Semiconductor is part of China’s growing ecosystem of power device manufacturers, producing components used in energy-efficient systems and electric vehicles. Power semiconductors are considered crucial for the transition to greener technologies, making them a strategic target for companies seeking long-term relevance in both consumer and industrial markets.
