The $572 million USD acquisition of German wiring harness giant Leoni was not a coincidence for Luxshare Precision. From consumer electronics to the automotive industry, from components to system integration, it outlines the transition path of Luxshare Precision from a foundry giant to a global industry chain player.
When Luxshare Precision completes the transaction with Germany’s Leoni AG in 2024, the capital market will have long been accustomed to the company’s “acquisition-style expansion”.
Since its establishment in 2004, Luxshare Precision’s growth history is almost equivalent to a history of mergers and acquisitions, and the 4.1 billion acquisition of Leoni is just the latest step in its huge chess game.
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The $572 million USD purchase is not only a wiring harness factory, but also an “entry ticket” to the European automotive industry.
This highly anticipated cross-border merger and acquisition, with a total transaction price of $572 million, covers 50.1% of the shares of Leoni Group and 100% of the shares of Leoni Kabel GmbH, a core wiring harness subsidiary. For Luxshare Precision, this is not only a business expansion, but also a precise positioning of the voice in the global automotive supply chain.
Founded in 1917, as a representative of German industrial civilization, Leoni Group’s wiring harness business covers 31 countries around the world, serving more than 80% of global automobile brands such as Mercedes-Benz, BMW, and Volkswagen, and has accumulated deep technical accumulation in the fields of high-voltage wiring harnesses and automotive Ethernet.
LEONI has been deeply involved in the field of high-voltage wiring harnesses for electric vehicles for many years. With a number of patents and technological accumulation, it has built significant advantages in core performance such as pressure resistance and heat dissipation.
However, due to poor management, Leoni fell into debt, sales growth was weak, and it was in a long-term loss-making state.
In 2023, Leoni AG’s revenue was 5.46 billion euros, net profit was negative 128 million euros, and its subsidiary Leoni K had a net loss of 13.28 million euros.
The “precision” of this acquisition lies in the fact that Luxshare Precision spent $572 million USD to buy Leoni’s European production capacity, high-voltage wiring harness and other advantageous technologies, as well as the “historical trust” of automakers such as Volkswagen and BMW.
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Consumer electronics: Strengthening the foundation of “king of OEM” through acquisitions
Looking back at Luxshare Precision’s acquisition path, its acquisition were first reflected in the consumer electronics field.
From a single connector manufacturer to Apple’s core supplier, each step of the leap was accompanied by key mergers and acquisitions
In 2010, Luxshare Precision acquired part of the equity of BSC Technology, improving the upstream cable production of connectors;
In 2011, it acquired 30% of the equity of Kunshan Liantao Electronics for $81 million, which became a key leap for it to enter the Apple industry chain – Liantao’s production capacity and technology in the field of computer connection cables directly allowed Luxshare Precision to obtain Apple MacBook orders. In the same year, the acquisition of Keertong Industrial made up for the production shortcomings of power plug cables;
In 2012, the full acquisition of Zhuhai All-Winner FPC allowed Luxshare Precision to enter the field of flexible circuit boards and successfully enter the 3G communication and smartphone industry chain;
In 2013, it participated in SPEEDTECH (HK) CO., LIMITED and extended the connector technology to smartphones and communication server scenarios;
In 2014, it acquired Fengdao Electronics and changed its name to Luxshare Electronics (Kunshan), and proactively laid out the high-end market of wearable devices.
The real “qualitative change” began with the deep cultivation of the field of acoustics. In 2015, Luxshare Precision invested $111 million to become the largest single shareholder of Merry Industrial, a company that supplies speakers for Apple MacBook. This allowed Luxshare Precision to master high-end acoustic technology for the first time. After further acquiring 51% of the shares of Merry China’s subsidiary in 2017, Luxshare Precision quickly entered the AirPods supply chain.
In the following years, it acquired Merry Electronics(Suzhou) to consolidate its micro-electroacoustic capabilities, acquired Wistron’s Kunshan factory for $461 million USD to enter the iPhone OEM, acquired Rikai Computer for $839 million to obtain metal structural parts production capacity, and its holding company Lizhen Precision acquired Pegatron’s Kunshan factory for $293 million USD to expand its ability to accept Apple orders…
This series of actions has enabled Luxshare Precision to grow from Apple’s “parts supplier” to a “core OEM partner” that can cover all categories such as iPhone, AirPods, and Apple Watch.
By the beginning of 2025, Luxshare Precision will invest $1.6 billion USD in a smart terminal project in Kunshan, and plans to exceed $11 billion USD in annual output value after reaching full production – this is not only an expansion of consumer electronics production capacity, but also a concentrated reflection of its ability to form “parts + complete assembly + ecology” through acquisitions and integration.
Today, Luxshare Precision has transformed from a single connector manufacturer to the “OEM king” in the consumer electronics field, and the starting point of all this is precisely those seemingly scattered but interlocking acquisition layouts.
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Automotive sector: From outsider to Tier 1 acquisition
Luxshare Precision’s ambition is far more than “manufacturing a few more products”.
In recent years, as the consumer electronics market has become increasingly saturated and industry competition has become increasingly fierce, finding a new growth curve has become Luxshare Precision’s top priority. The booming automotive industry, especially new energy vehicles and smart cars, has provided it with a broad strategic depth.
In the automotive field, Luxshare Precision’s acquisition trajectory clearly outlines the advancement path from “marginal participants” to “core players”.
In 2012, it acquired 55% of the equity of Fujian Yuanguang Optoelectronics, laid out automotive connectors and wiring harnesses, and entered the automotive electronics track;
In 2013, it completed the acquisition of Germany’s SuK company, expanded automotive plastic parts, and successfully opened the door to the supply chain of German automakers;
In 2017, Hong Kong Luxshare acquired the body control system division of Germany’s ZF Friedrichshafen (ZF), and obtained Tier 1 supplier qualification
In 2022, it announced that it would jointly establish a joint venture with Chery New Energy. At the same time, Luxshare Limited planned to purchase Chery’s relevant equity for $1.4 billion USD;
• In 2024, it strengthened its global layout and acquired German automotive parts supplier Leoni and its wholly-owned subsidiaries.
The $572 million acquisition of Leoni is the latest footnote in Luxshare Precision’s acquisition history in the automotive field. It can quickly enter the global mainstream automotive wiring harness market by integrating Leoni’s technology and resources, and directly obtain its customer network of global mainstream automakers.
It is worth noting that through the continuous observation of “International Cable & Connection” organization, although Luxshare Precision’s automotive business has long been at a low level in its overall revenue, it has maintained a revenue growth of about 50% for three consecutive years, with a growth rate far exceeding that of its main business.
This is not only an expansion of business scale, but also a strategic leap for Luxshare Precision from a consumer electronics foundry to a global automotive Tier 1 supplier, laying a key foundation for its leapfrog development in the automotive industry.
In the two core fields of consumer electronics and automobiles, acquisitions have become the key to Luxshare Precision’s breakthrough. In the communications and photovoltaic tracks, Luxshare Precision’s layout also hides ambitions.
In the communications field, it acquired the assembly and testing business of Qorvo Beijing Co., Ltd. in Beijing and Shandong, and plans to acquire related businesses of Wingtech Technology to strengthen its RF chip and system integration capabilities; in the photovoltaic field, it acquired the assets of Xinhao Optoelectronics‘ wholly-owned subsidiary to enter the new energy market segment.