Overseas mergers and acquisitions in the automotive industry entered the era of “national will”

Bank funding may have replaced Big Group as the main investor in the acquisition of Saab. Recently, Saab's acquisitions again reported the latest developments. A domestic bank will join hands with young cars to provide Saab vehicles with restructuring funds. This also means that the domestic non-automotive industry funds will be directly involved in the acquisition. This is the third time that domestic capital has been involved in the acquisition of overseas auto industry after the acquisition of Nissan and Honda shares this year.

Just before the news broke out, Vice Premier Wang Qishan emphasized at the symposium on the import and export of six provinces at the beginning of this month that it was necessary to increase overseas mergers and acquisitions of key parts and components and seize the current opportunity to “go global” to acquire key foreign equipment. And parts manufacturing companies, patented technologies and brands.

The active involvement of various capitals and the warming of policies has brought the merger and acquisition of overseas automobile industry into a new stage. Analysts pointed out that the overseas mergers and acquisitions of the auto industry, with the cooperation of policies and various funds, have already expanded from the original needs of individual companies into a new era of 2.0, which also conveys the national will behind overseas mergers and acquisitions.

Bank funding was involved in the Saab acquisition as an instigator to acquire Saab vehicles. A large group may not be able to imagine such a situation. Due to GM's strong deterrence, Huge may have to "be" out of the entire acquisition.

On December 6, Huge Group issued an announcement saying that the Swedish automobile announced on December 5 (Central European Time) that it is negotiating with the youth car and a bank from China to discuss the plan to invest in Swedish car. The plan includes a short-term plan. The solution was to enable Saab to pay November wages and continue restructuring. The results of the negotiations are still uncertain. Any possible transaction will depend on the possibility of the approval of a Chinese bank to join the merger.

This also means that funds from the Chinese banking industry have officially entered the vision of acquiring Saab vehicles. According to sources in the Mainland, the new plan was involving BOC Group Investment Co., Ltd., a subsidiary of Bank of China, to intervene. It will hold a 29.9% stake in Saab, 19.9% ​​will be held by youth cars, and Sweden Motors will still hold a 50.1% stake. The role of the Bank of China in this investment is similar to that of PE and will not directly participate in the business operations of the company. It will mainly provide funds.

Prior to this, GM, which still had priority shares in Saab, rejected the plans of Young Lotus and a huge group to acquire 100% of Saab on the ground that it was not in the interests of shareholders. Although the "Double Pang" has revised the acquisition plan several times since then, including adjusting the proportion of the two companies' shares, it still has not obtained GM's release.

Zhang Zhiyong, an automotive analyst, believes that the acquisition of Saab is not just a “double-pronged” issue, but an issue for the entire Chinese automotive industry. Judging from the entire Chinese auto industry, the acquisition of Saab is a must-see. For Chinese companies, after two or three decades of development, they have still not achieved a key breakthrough in core technology. It is now a good time for Chinese companies to achieve technological breakthroughs through acquisitions. Therefore, no matter how the plan changes and how the equity ratio changes, China has been adjusting acquisition plans to secure Saab.

Domestic Capital Active Overseas Investment in Automobiles In fact, the acquisition of bank funds into the overseas automobile industry was not the first time. Before this Saab acquisition, a domestic fund called SSBT OD05 (the full name of the “SSBT OD05 Integrated Account Agreement Client”) was established. Has bought a large number of shares of two Japanese auto companies.

Among them, at the end of September, the fund purchased 2.12% of Honda Automobile shares, and currently holds the seventh position among Honda Motor's major shareholders. At the end of March this year, the fund also purchased 1.17% of Nissan’s preferred shares, worth US$52.82 million, and became Nissan’s ninth largest shareholder.

It is understood that the fund is invested by CIC, a sovereign wealth fund China Investment Co., Ltd., and CIC is a state-owned sole proprietorship company specializing in the management of foreign exchange capital investment through the approval of the State Council of China.

“Actually, China’s current foreign exchange reserves are very large. Now how to increase their utilization rate has become an urgent problem to be solved. Overseas investment is an inevitable measure to increase foreign exchange reserves to a certain extent, just as Japan’s foreign exchange reserves became the world’s Afterwards, like investing overseas, Chinese companies nowadays participate in overseas investment through a variety of means such as participation, holding, and full acquisition. Generally speaking, this is all directed against China's economic conditions.” Zhang Zhiyong said that such a fund with government background The overseas auto industry, like the participation of the Chinese bank’s funds, revealed that the government is strengthening overseas mergers and acquisitions in the automotive industry.

Car analyst Jia Xinguang also said that the frequent appearance of domestic capital in overseas investment will definitely benefit the domestic auto industry. One is to promote Chinese companies to enter the world, and the other is to obtain foreign capital, technology and market.

The mergers and acquisitions of parts and components have been surging. In addition to domestic equity investment in the overseas auto vehicle companies, major domestic parts and components companies have also stepped up overseas mergers and acquisitions. Earlier this month, Vice Premier Wang Qishan pointed out in his inspection of heavy industry companies: “Catch the current opportunity to go abroad and acquire foreign key equipment and parts manufacturing companies, patented technologies and brands.”

In July of this year, Chongqing Textile Group completed the acquisition of Germany's car distribution company Sagami Group with 68 million euros, which resulted in the core technology of the automotive seal industry. Sagami has the ability to develop new products in tandem with OEMs. After the completion of the acquisition, Chongqing Textile Group achieved 81 patent applications and registered in several countries, including six world-leading technologies, in particular, none. Broken head seals and light thermoplastic skeleton technology, leading global counterparts for more than 3 years.

Not long ago, the "China-Germany Auto Parts M&A First Case" was staged in Ningbo. The Johnsonian Group acquired 74.9% of the shares in Puri in Germany at a price of more than 1 billion yuan. At present, legal procedures and M&A delivery have been completed. The two parties will officially form an automotive electronics company with annual sales of more than RMB 6 billion.

More and more Chinese companies have chosen overseas mergers and acquisitions to use their technology and market advantages to achieve their own transformation and development. According to the Ministry of Industry and Information Technology of the People's Republic of China, exports of auto parts and components in China reached 9.29 billion U.S. dollars this year, a year-on-year increase of 21.66%. And there is a clear shift in the export of auto parts products to higher-tech products.

Some analysis pointed out that overseas mergers and acquisitions play a greater role in the improvement of production technology of auto parts. Therefore, China's auto parts and components have greatly increased in quantity and quality. “At present, there are a lot of companies that buy auto parts and components for domestic companies, and they have acquired good technical resources through acquisitions. These parts and components mergers and acquisitions should be said to be a good example for domestic companies to implement overseas mergers and acquisitions.” Jia Xinguang said .

Integration is more important than mergers and acquisitions Although China's capital is integrated into overseas mergers and acquisitions, it will bring many opportunities to the automotive industry, but the challenges are also accompanied. First, the barriers to mergers and acquisitions of domestic companies are high, and many plans have stopped at the negotiation stage.

Zhang Zhiyong believes that China’s increase in overseas investment in the automotive industry will inevitably face some resistance. In the Saab acquisition, GM's obstruction is not simply a corporate issue. Although there is a five-year cooperation period from auto parts, supplier channels, core technology GM and Saab, these technologies overlap with Shanghai GM. However, this may be a superficial reason. The key is the incompatibility of the great powers with the rise of China and the manifestation of the containment strategy.

Judging from the experience of Chinese auto companies going to sea for mergers and acquisitions, domestic companies have more failures to succeed. Before the “Double Pang” contact with Saab, Huatai experienced a “flashing wedding flash” with Saab. Because behind the M&A case, it involves not only the interests of the companies, distributors, and employees of the two parties, but also the interests of the two countries and even the third-party companies and the country.

In the plan to acquire Saab, General Motors, as an old club and technology provider, will be able to work out the overall situation. It can be seen that overseas acquisitions must obtain a lot of consent and must go through a difficult process.

Second, after overseas mergers and acquisitions, converting investment into revenue is not a simple matter. From the perspective of the entire automotive industry, the most important value of overseas M&A should be to harvest the advanced technology of the other car company.

Jia Xinguang also believes that “it is not saying that investment will definitely change the disadvantages of the auto industry, because firstly, auto companies must be able to integrate, digest and absorb resources and use them all, not to say that if they buy foreign companies, they can upgrade the Chinese auto industry. ."