China International Development Corp is looking to buy Lonten Semiconductor in a deal that could reach HK$9 billion. This move shows the leather goods maker wants a bigger role in China’s fast growing chip industry.
The company has signed an agreement with Lonten’s top shareholder Xu Xichang who owns 24.81% of the semiconductor firm. He will help bring the remaining shareholders on board.
The planned deal is expected to be valued between HK$4.5 billion to HK$9 billion. China International Development may pay in cash or through new shares or a mix of both.
The company has secured a three month exclusive period to review Lonten’s financial and business records. This gives them the first right to push the deal forward.
China International Development mainly makes leather products yet it also has business in the auto sector. Now it wants to grow in power semiconductor devices which play a key role in today’s electronics.
If this acquisition happens it could speed up the company’s shift beyond leather goods into a high tech future.
