The acquisition would mark the latest Chinese investment in German technology, after a $9 billion deal earlier this year saw the Chinese magnate behind Geely Auto take a major stake in Mercedes-Benz maker Daimler.

Ningbo Jifeng, already a major shareholder in Grammer, is in "advanced negotiations" with the firm and has offered 60 euros per share with a further proposed dividend of 1.25 euros per share in a potential takeover bid, the German company said.

Grammer shares closed at 51.3 euros on Monday and are down a just over 1 percent so far this year. It has a market capitalisation of 648.3 million euros.

Grammer said it was uncertain whether the negotiations will be concluded successfully and a takeover offer will be launched. It added it was "assessing strategic options in the best interest of the company".

Ningbo Jifeng raised its stake in Grammer in October last year to 25.51 percent. Sources told Reuters around then the Chinese firm wanted to increase its stake amid an power struggle with a rival shareholder, Bosnia's Hastor family.

Grammer's management has generally welcomed the attention of Ningbo Jifeng, another supplier of vehicle interior components, as a potential "white knight" in its conflict with Hastor.

(Reporting by Adam Jourdan; Editing by Himani Sarkar)