The acquisition in 2022 of flow sensor developer Flusso Ltd. (Cambridge, England) is the latest deal to be questioned by a UK politician under national security concerns.
MP Alicia Kearns, chairwoman of the foreign affairs select committee and of the China Research Group, has said the acquisition of Flusso by a Chinese company was of “significant” concern. Kearns has written to Business Secretary Grant Shapps calling for the deal to be investigated under national security legislation.
Flusso, founded as a Cambridge University spin off in 2016, was sold in 2022 for £28 million (about US$34 million) to an unnamed company and an unnamed private equity fund that both appeared to have Chinese origins (see UK flow sensor startup sold to company with China connection). Kearns said that the opaque way in which the deal was announced “screams there are concerns.”
According to documents recently filed with Companies House in the UK, the 100 percent acquirer of Flusso is Shanghai Sierchi Enterprise Management Partnership LP, a special-purpose vehicle set up at the end of 2021.
Who owns Sierchi?
Sierchi is in turn 80 percent owned by by Zhenxin Equity Investment Partnership, according to the South China Morning Post. Zhenxin Equity is a subsidiary of Baoding Investment, a Shanghai investment company that is reported to have Chinese state-owned backers.
Flusso has an intellectual property portfolio of CMOS MEMS and sensor packaging innovations covering 13 patent families. It has demonstrated highly compact fluid sensors and is currently developing its first gas sensing products for market launch.
Kearns publicised that she was writing to the Business Secretary on Twitter saying: “This deal sees a British company, critical to our economic security and future prosperity, captured by an entity set up to serve the needs of a systemic competitor.”
The call to overturn a Chinese corporate purchase after the fact has similarities to Nexperia’s buy-out of Newport Wafer Fab (see Nexperia lawyers up for fight over Newport Wafer Fab). Nexperia is a Dutch company that is owned by China’s Wingtech Technology Co. Ltd.
Over recent years Chinese entities have struck numerous deals to acquire European semiconductor companies.