Chinese chip maker Tsinghua Unigroup has reportedly acquired components maker Linxens in a deal which has not yet been made public.
According to sources speaking to Reuters, the acquisition is worth roughly 2.2 billion euros ($2.6 billion).
Four banks have reportedly agreed to offer Tsinghua a $1.75 billion bridge loan to finalize the purchase.
The buyout was made over a month ago but has not yet been made public. The deal requires Tsinghua to acquire Linxens from private equity group CVC and there are regulatory hurdles to overcome in France, Germany, and the firm's union.
However, sources told the publication that no objections are expected from regulatory bodies.
Beijing-based Tsinghua Unigroup, a subsidiary of Tsinghua Holdings, is a manufacturer of wireless systems-on-chip and radio-frequency semiconductors. Founded in 1988, Tsinghua's main products are processors suitable for smartphones and mobile handsets, set-top boxes, and other consumer electronics.
The company had previously attempted to acquire Micron Technology but the purchase was blocked by regulators on the basis of national security.
Paris-based Linxens is a French company which develops smart card applications for consumer, medical, and industrial applications. The company specializes in microconnectors, RFID antennas, and inlays, and produces approximately 800 million RFID transponders per year.
Linxens was acquired by CVC Capital Partners in 2015. The firm employs over 3,000 staff members worldwide.
The deal -- and whether or not any regulatory objections appear -- will stand as a test to the trade relationship between China and European countries.
Tensions between China and the United States are seemingly becoming more strained every week, with US President Trump and Chinese regulators involved in a tit-for-tat war over trade tariffs.
Levies of up to 25 percent have been proposed on a vast array of Chinese imports, which has already begun to impact US farmers. A care package of up to $12 billion is being prepared by the US Administration in aid.
ZDNet has reached out to Tsinghua and Linxens and will update if we hear back.