Luxshare will become Leoni's majority shareholder with a stake of 50.1 percent, the German group said in a statement.
The Chinese group paid some 320 million euros ($356 million) for its controlling stake in Leoni, according to figures published by Luxshare on Friday.
The rest of the shares will be held by Austrian businessman Stefan Pierer, who took the supplier private last year at the end of a difficult restructuring process.
Under the agreement, Leoni's cable division will be spun off and sold to Luxshare's Singapore-based subsidiary Time Interconnect, the German group said.
Luxshare's investment in the German group would "enhance Leoni's competitiveness across all fronts", Leoni CEO Klaus Rinnerberger said in the statement.
Luxshare's CEO Grace Wang said the deal "marks a pivotal step in our journey towards becoming a global leader in the automotive sector".
Leoni, which employs some 95,000 people worldwide, went through major restructuring in 2023 after the failed sale of its cable division left it in financial trouble.
The saga saw the Nuremberg-based parts-maker delist from the Frankfurt Stock Exchange and businessman Pierer take full control.
The German auto sector has come under increasing pressure from the move away from combustion engines to electric cars and the rise of international competitors, notably from China.
The challenges in the sector have seen a slew of suppliers, including ZF, Bosch and Webasto, announce job cuts.
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