The five major organizations are part of the "going out" strategy for parts and components companies

A conference on the auto parts industry gathered together Citi, PricewaterhouseCoopers, Ernst & Young, Shi Daofen, and Intewech, among the top five investment consulting agencies in the world. This was unthinkable before. However, on March 27, 2009, at the “strategy for implementing the 'going out' strategy organized by the China Association of Automobile Manufacturers, due to the spread of the financial crisis, and because the theme of the conference was “going out”, there were only five major issues. The confluence of institutions in Xiaoshan, Hangzhou.

From the tracking of Chinese business delegations in the four Western European countries to the personal mention of the Chinese business, Citigroup and PricewaterhouseCoopers are quite keen on the taste of the economy.

“The financial crisis At present, many auto parts companies in Europe and America are actively disposing of their projects. Some companies have already entered the bankruptcy process and are constantly selling related assets. The acquisition of Chinese companies at this time has strategic significance.” The news from the front line attracted the interest of the Chinese auto parts industry. Reporters have already heard of this: A large domestic parts and components group has been paying close attention to those companies that are famous for bankruptcy protection.

So, the acquisition is to complete the purchase of the other company? This is obviously not enough.

Acquisition technology may be more valuable than acquisitions

“Chinese companies’ going global” can be divided into two major segments: first, entering the other market, setting up factories abroad, and especially entering the markets of some emerging countries; second, acquiring core technologies and new application technologies.” Ernst & Young’s Chen Zheng Ren's manager believes that "'going out' is certainly not just an acquisition. Our product export is also called 'going out'."

Obviously, in the mind of Chen Zhengren, the core content of the acquisition should be the technical category.

Chen Jiangang, Director of Corporate Construction Consulting at Interchina, also stated: "The acquisition target may not be the enterprise, but it may be technology or the right to use the technology."

“Utilizing the golden opportunity for the reassessment of asset pricing right now, it is of utmost importance to buy back what is really useful.” Similarly, Dr. Kanggang Hu, a company director from Staufen, also put forward a similar point.

Focus on small and medium-sized enterprises with technological features

According to the case presented by a world-renowned consulting company, the auto mergers and acquisitions projects they dominated were often costing hundreds of millions of U.S. dollars, and some even reached several billion U.S. dollars, making the heads of many small and medium-sized component companies at the conference feel unattainable. In fact, from the global auto industry mergers and acquisitions case, many of them are not all “Giant Elephant” projects. Second, even if the companies that want to buy and sell do not have much self-owned capital, there will be many financing channels. And, with proper financing and debt management integration, the new company may become a healthier company.

Most of the consulting organizations attending the meeting are more optimistic about the acquisition of some small and medium-sized enterprises with European and American characteristics. Ernst & Young’s Chen Zhengren directly pointed out that Chinese parts and components companies should focus their acquisitions on small and medium-sized companies with technical characteristics.

Chen Jiangang of the company also proposed that the acquisition of small and medium-sized enterprises has many advantages. For example, the enterprise itself may have a high level of technology and R&D capabilities, which can speed up the acquisition process and acquire it at a lower price, spreading the risks of the buyer and enabling The acquisition difficulty is minimized and the post-acquisition integration difficulty is simplified.

From the data, it can be seen that the business of Intemar itself focuses on SMEs. At the meeting, Chen Jiangang provided participants with access to the 27 currently-acquired corporate resources of the company, including 8 German companies, 8 US companies, 5 British companies, 5 Japanese companies, and 1 Italian company. From the perspective of the texture of these companies, they have been selected after they have a certain value. One of them is a company that makes electronic systems for vehicles. It can provide 10 million pounds in profits each year. If a Chinese company can acquire and integrate well, it may not only increase the profits of the company by hundreds of millions of yuan per year, but also bring certain technical advantages to the company through comprehensive intellectual property acquisition.

The core value of acquisition depends on the synergy effect

"Designing a feasible financing plan is very important," said Dong Gongwen, manager of Citicorp. "If you neglect debt management, it may be the biggest mistake the company will make in the future." There are many invisible factors in the acquisition process. Indeed, as an expert has said, including the use of financial instruments, how to make the company's value-added chain more valuable after acquisition and acquisition is the key to the problem.

Representatives of five famous investment consulting organizations all stated that the hardware factors in mergers and acquisitions are almost all visible, and the software factor actually needs more attention. Dong Gongwen directly stated: "The core of acquisition is value creation, which is reflected by the synergies in mergers and acquisitions." This view of his company was also mentioned in the speeches of several other company representatives.

“The risk that cannot be seen in the report is the biggest risk.” PricewaterhouseCoopers partner Lu Jundao of the Corporate Finance and Mergers & Acquisitions Division disclosed the “mystery” disclosed in their bank. According to him, PricewaterhouseCoopers can successfully spend the integration period after mergers and acquisitions, and even provide specialized integrated teams to lend to companies.

Dr. Kanggang Wang of Shi Daofing suggested that the integration of corporate culture that represents the values ​​of most people in the enterprise is often the key to whether a company has sustained profitability, and it is also an invisible factor that affects the development potential and space for the company.

Views of all parties

Mergers & Acquisitions: Mergers and Acquisitions of PK Delphi

- Can "not be bad" be able to handle things well?

As one of the leading parts and components companies in China, the Shuguang Group, which is principally engaged in axles, has already taken steps to “go global” as early as three years ago. They have companies (offices) in the United States and South Korea. At the same time, a technology research center was established in the United States.

According to Zhang Fengjun, vice president of Shuguang Group, located at the Dawning America Technology Center in Detroit, USA, it has resolved the strategic supplier requirements for North American customers, and can also support the operation of two domestic and foreign market segments. Through the acquisition of a U.S. company, Sugon has solved the four-wheel drive chassis detection capability and the entire hydraulic system test capability, and can better develop products for local U.S. customers.

Zhang Fengjun said that the development of the US business is of great significance to the company’s export strategy and product strategy.

As a potential merger acquirer, Yang Rongwei, manager of business development at Delphi (Shanghai) Power Propulsion Systems Co., Ltd., has even more unique insights. Because it is not part of Delphi’s core assets, power propulsion systems companies are likely to face being sold.

"Isn't bad money meant the success of the acquisition?" Yang Rongwei expressed concern that the richest Chinese companies may blindly "go out."

“Only buy what you want, and not buy it like a 'subprime'.” Yang Rongwei gave his success criteria—“Eat well and manage it well” is the basic of acquisition success. standard."

Parts companies: each has its own ideas

- No "going out" does not necessarily mean "going out"

“We do not have the idea of ​​'going out' at present, mainly to listen to the experts’ ideas and understand the ideas of other companies.” This is almost the same answer that reporters get when communicating with several entrepreneurs during the conference break. . The Secretary-General of a branch of the China Automobile Association also told reporters that the club has not yet established the idea of ​​“going out”. After this meeting, it is particularly hoped that the China Automobile Association will organize a corresponding delegation to visit a foreign country. Only afterwards can a better judgment be made.

Rui Health Group’s vice president, Tao Health, has different ideas from the above. This Zhejiang private company, which has been listed on the Nasdaq stock market in the United States, did have plans to acquire companies in the United States last year.

However, this year saw the waning of the local economy in the United States. The company’s idea has changed from acquiring to setting up a company, and the goal of “acquisition” has become the relevant local talent in the United States.

Lu Jun of PricewaterhouseCoopers also told reporters that their company has already communicated and reached cooperation intentions with several companies attending the meeting, and some may have entered a more substantive stage. Although he did not say who these companies are, the reporter could also scrutinize them from the list of participating companies.

Although most parts and components companies still linger before “going out”, failing to go outside does not mean that there is no idea of ​​“going out” and many companies are already thinking seriously.

Experts point of view: dare to think but not blind, "buy out" but also a win-win situation

- Professionals should let professional people do

As a veteran who has been engaged in auto parts business for many years, the Deputy Secretary-General of the China Association of Automobile Manufacturers, Dong Jianping, took part in the four countries of Western Europe and was one of the key figures in actively organizing this “going global” seminar.

Why do Chinese auto parts companies go out? "We don't go 'going out' for 'going out'," said Dong Jianping. China is still not a car powerhouse, especially if its own brand is not strong. Parts of its own brand are marginalized. The parts industry is already in crisis. “We don’t have time to go step by step.”

Dare to be able to catch a ride, be cautious without blindness to clearly understand the purpose of “going out” and to define what we want.

"We should not only know to buy people's production lines." Dong Jianping criticized the "buyout" approach. He said that the acquisition is not intended to put the other party to death, more to buy each other's technology, to play the other side's original advantages, the two sides can win more money through cooperation and win-win.

Speaking of the five major organizations participating in the concept of “going out”, the reason given by Dong Jianping is to let professional people do professional things.

Influenza Vaccine

Influenza Vaccine,Influenza Vaccine Development,Influenza Vaccine Strains,Flu Vaccine

Changchun BCHT Biotechnology Co.,Ltd , https://www.ccbcht.net