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The unsuccessful Lumileds acquisition underscores the increasing challenges Chinese technology companies encounter when pursuing foreign deals amid stricter US regulations.

The top Chinese LED chip manufacturer and its Malaysian partner have withdrawn their US$239 million cash proposal to acquire the Dutch technology firm Lumileds Holding following resistance from U.S. officials, representing another recent challenge forChinese tech investment overseasafter the prominent Nexperia case.

Sanan Optoelectronics, listed in Shanghai, stated in a disclosure announcement on Friday that despite several rounds of discussions, theCommittee on Foreign Investment in the U.S.The CFIUS concluded that the deal would present “irresolvable U.S. national security risks” and requested the companies to withdraw their application and cancel the transaction.

“Consequently, on April 17, 2026, the parties sent a letter to CFIUS retracting the submission and choosing to abandon the deal,” the statement noted.

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Under the stock acquisition agreement, approval from all pertinent domestic and international authorities was a prerequisite for closing. As CFIUS significantly obstructed the transaction, this requirement could no longer be fulfilled, as stated by the company.

This is the second instance where a Lumileds sale to a Chinese purchaser has failed due to CFIUS resistance, underscoring the challenging circumstances confronting…Chinese tech firmslooking to attract international clients via mergers.

“The company will remain committed to its international expansion strategy and will continue to enhance its competitiveness in the mid-to-high-end LED industry and global markets,” Sanan stated. The company added that the failed deal would not significantly impact its financials or daily operations.

In 2025, Sanan, along with its Malaysian partner Inari Amertron Berhad, revealed their collaborative strategy to acquire 100% of Lumileds and its subsidiaries in Europe and Asia. This move would grant them access to the Dutch company’s manufacturing sites in Singapore and Malaysia, allowing them to “swiftly establish overseas production facilities, ensuring a stable supply” for global clients.

“This holds great importance for promoting the company’s global expansion strategy and increasing its international revenue,” Sanan stated at that time.

Washington has been increasing controls over Chinese technology entering its market. Last week, the US Federal Communications Commission announced it is evaluating a ban on Chinese telecommunications companies operating data centers within the country, while also limiting their access to US networks and infrastructure.

This is not the first instance where CFIUS has prevented a Chinese effort to purchase Lumileds. In 2015, Philips revealed intentions to sell 80.1 percent of the company to a group headed by the Chinese private equity firm Go Scale Capital for $3 billion. In January 2016, the transaction was halted by CFIUS, reportedly due to worries regarding Chinese influence over dual-use semiconductor technology used in LED production.

Even though both companies made “continuous efforts” to support the deal, “none of these attempts were able to resolve the unclear government issues,” Go Scale Capital stated at that time.

The corporation was ultimately purchased by Apollo Global Management, a U.S.-based firm, through a leveraged buyout, resulting in Lumileds accumulating significant debt.

The period of ownership ended with Lumileds declaring Chapter 11 bankruptcy in 2022. The firm implemented a pre-arranged restructuring plan to reduce approximately US$1.3 billion in debt within its U.S. and Dutch operations, as stated by then-CEO Matt Roney, who attributed the difficulties to “continuous challenges caused by global supply limitations, issues related to the Covid-19 pandemic, and the situation in Ukraine.”

The recently abandoned acquisition attempt occurs while business connections between Beijing and The Hague continue to be strained due to the ongoing Nexperia situation. Tensions exist between Nexperia and its Chinese parent company Wingtech as the Dutch Enterprise Chamber examines the company’s leadership under former CEO Zhang Xuezheng.

Wingtech had an initial meeting with the new Dutch administration, but no progress was made, according to reports from the South China Morning Post. The Dutch government has also engaged in discussions with high-ranking Chinese officials, yet no resolution has been found.

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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.

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