France not objecting to sale of Linxens to Chinese group

PARIS (Reuters) - The French government is not objecting to a takeover of French smart chip component maker Linxens by China's top state chip manufacturer Tsinghua Unigroup Ltd, as it considers the firm to be non-strategic, a finance ministry official said on Thursday.

Tsinghua Unigroup has signed a deal to acquire Linxens for about 2.2 billion euros ($2.6 billion), five people with direct knowledge of the matter told Reuters earlier this week.

France, like other European countries, has moved to tighten takeover rules to protect companies deemed strategic, as it walks a fine line between preserving a surge in investments and preventing its technology from falling into the hands of foreign powers like China.

But the government will not use a 2014 decree to block the acquisition of Linxens, the French official said, because the company does not make semi-conductors but instead makes the "passive", non-strategic part of chips.

"France has not blocked anything," the official told Reuters.

Linxens did not return repeated requests for comments.

Before the Linxens deal, Tsinghua accumulated a stake in Germany's Dialog Semiconductor Plc.

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 percent to $1.9 billion, according to Thomson Reuters data.

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.

(Reporting by Gwenaelle Barzic; Writing by Michel Rose; Editing by Sudip Kar-Gupta)