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Overseas Mergers And Acquisitions: Technology Driven

2011/10/18 9:27:00 25

Overseas Merger And Acquisition Technology Drive

If last year Ningbo cistar Limited by Share Ltd successfully acquired Switzerland, Tanger group is only a case of overseas mergers and acquisitions in the industry. So this year, China Hi-Tech Group Corporation's acquisition of Hongkong Lixin industrial group and ericon newmag combing business unit is enough to push overseas and buy from "case" to "phenomenon" category.

When the domestic textile machinery enterprises are worried that they can not catch up with foreign countries.

advanced

At the time of textile machinery technology, foreign textile machinery enterprises are also looking for ways to fully enter the world's largest textile machinery market. The complementarity between this technology and the market will become a major opportunity for the global textile machinery industry to integrate resources, multinational enterprises and overseas mergers and acquisitions.

At present, most of the mergers and acquisitions of textile machinery enterprises in China are embodied in strategic pactions on capital or equity. Therefore, the acquirers are not all textile enterprises. By comparison, the purpose of overseas mergers and acquisitions of textile machinery enterprises is obviously more direct and clearer, that is, to acquire advanced overseas textile technology as the driving force, and the target of mergers and acquisitions refers to the overseas advanced textile machinery technology groups.

High threshold for overseas mergers and acquisitions

Ningbo Cixing Limited by Share Ltd has net assets of 22 million 483 thousand euros.

Global

The third major manufacturers of computerized flat knitting machines, the Italy fashion design center and the Shanghai Textile Machinery Co., Ltd., which has been under the banner of the company, have acquired a wholly-owned takeover. The China Hi-Tech Group Corporation has bought a stock of Lixin industrial major shareholder at a premium of HK $5 per share.

Zhuyu's successful case shows that strong financial strength is a prerequisite for enterprises to achieve overseas mergers and acquisitions.

However, when the enterprises that meet the conditions of merger and acquisition funds are on the same line, the amount of capital is not the decisive factor for overseas enterprises to choose to buy the company.

"In mergers and acquisitions, the ability of an enterprise is the key to an enterprise's successful acquisition."

In the Journal of Ningbo University published in May this year, Sun Pingfan, chairman of Ningbo Cixing Limited by Share Ltd, expressed this view in analyzing the company's takeover case.

Sun Pingfan believes that such enterprises' capabilities lie in decision-making, human resources and technology.

Specifically, enterprises need to have keen strategic discernment, managers must have decisive decision-making ability, and enterprises must have the ability to make decisions.

Young

A high quality talent pool has effective and harmonious business capabilities, familiar with the market and proficient in international operations. Enterprises must have their own brand, independent technology and excellent product quality.

Another factor that can not be ignored is the local advantages of Chinese enterprises in the domestic market.

Chen Xiaohong, director of the Enterprise Research Institute of the State Council Development Research Center, believes that Chinese enterprises have their own advantages in overseas mergers and acquisitions, that is, obvious procurement, sales and service advantages in the Chinese market.

"Relying on China's market advantage value chain integration mode, Chinese enterprises can rely on large scale and fast growing domestic market advantages to acquire foreign companies with higher technology level, and enhance the technological advantages of R & D and manufacturing of Chinese enterprises through value chain integration and technology digestion and absorption."

In addition, the so-called "good birds choose wood and live", enterprises in the process of mergers and acquisitions "first impression" is also crucial.

As a concentrated embodiment of soft power and "first impression", factors such as social prestige, responsibility image and management experience of enterprises and their leaders are also the intangible threshold set by candidates for M & A.

Technology driven factors

Nowadays, the overseas merger and acquisition, in essence, is caused by the amount of enterprise funds, but the relationship between M & A and M & A is an equal cooperation, mutual benefit and win-win relationship. It is more like a "marriage" behavior.

The determination of M & a industry is closely related to the strategic layout of enterprises.

As the first brand of Chinese flat knitting machine, Ningbo Cixing Limited by Share Ltd chose "strengthen the strong" and take the global four major computerized flat knitting machine manufacturers as the primary goal of mergers and acquisitions, in order to achieve further flight of technology and products in the flat knitting field that they are good at. As the largest spinning group of China, the Limited by Share Ltd group of China Heng Tian group chose to use "long board short board" to further enhance the strength in dyeing and finishing equipment and nonwoven equipment, and achieve globalization.

For domestic spinning machinery enterprises with overseas M & A conditions, choosing the right "marriage" target is a crucial step in the process of strategic expansion.

Although textile machinery enterprises choose technology as the driving factor without exception, there is a contingency of "looking at the right eye" in the process, and it is inseparable from scientific and meticulous objective comparison and growth prediction.

Heng Tian is "the first sight love" for the world's best and largest dyeing and finishing manufacturer Lixin group. The two sides expressed their willingness to cooperate in 1999.

Later, influenced by the environment of the textile industry, cooperation failed.

After that, Heng Tian kept a low profile and secretly accumulated the strength of mergers and acquisitions.

In 2008, the two sides launched substantive negotiations on mergers and acquisitions, and after 3 years, they finally reached a takeover agreement.

In comparison with Heng Tian, Cixing chose to buy the target.

process

More twists and turns.

The ability and strength of Japan island and Stoll, Germany, were first excluded.

After thinking about the potential and appreciation space that Target Corp might bring after its acquisition, Cixing gave up the acquisition of Prouty in Italy, because Prouty was leading in technology, but the brand influence was gradually marginalized.

While Switzerland is set up late, but the independent R & D technology is relatively mature, since the 80s of last century, there have been many invention results, which shows that it has been pursuing innovation and constantly improving its brand effect.

On the other hand, by the impact of the international financial crisis, Tanger has suffered losses, and it is eager for powerful companies to inject funds to solve the crisis faced by enterprises, which ultimately provides an opportunity for the successful acquisition of cistar.

It is understood that under the influence of the global financial crisis, the valuation of foreign textile machinery enterprises, including advanced technology and brand, is still at a historic low. In addition, the trend of European and American market withdrawing from the industry is becoming increasingly obvious. The overseas textile machinery enterprises' future "strength" is not an effective way to solve the existing domestic technology bottlenecks.

Integration and integration

It is only a year since the takeover of Tzu star, but it has been a long time since the acquisition of Li Xin, and the more pressing issue has been placed in front of the two enterprises.

The problem of absorption and digestion after purchase lies in all aspects of thinking mode, management culture and product concept. The real test has just begun for the successful acquisition of overseas enterprises.

It is reported that after the acquisition of TSE, the Swiss R & D base was developed as a new product development platform. The research and development products were first produced in Shanghai in small batch production. After the technology was mature, they were pferred to Ningbo for large-scale production. Combined with the advantages of foreign R & D and local low-cost production advantages, a new computerized flat knitting machine with high performance price ratio and high technology content was produced.

Technology integration only needs to cross geographical boundaries.

Administration

The integration needs to pcend cultural barriers.

Because overseas textile machinery enterprises have advanced enterprise management system and excellent management team, both enterprises choose to maintain relative independence of overseas business management and mechanism.

Sun Pingfan pointed out that Cixing adopted the strategy of "cultural integration". The premise of integration is to respect each other and carry out the management method of "participation not dominant". The personnel and equipment in foreign countries are not moving, and send people to study abroad, promote each other and develop each other, thus enhancing the operation efficiency after M & A.

Similarly, after the acquisition, the group will retain the core team and business structure of Li Xin, and cooperate with Li Xin in the field of dyeing and finishing equipment. For example, the sales system of the textile machinery in the mainland can complement each other with the global marketing network of Lixin, and the financing platform of Heng Tian can provide financial support for Lixin's customers.

Let us wait and see whether the "two" individuals of "1+1=2" before acquisition can realize the synergistic effect of "1+1>2" after takeover in collision and integration.