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Merger path
The so-called difference here refers to the way in which foreign machine tool companies are directly acquired by foreign machine tool companies. According to industry insiders, the way this company adopts is most likely to be equity mutual participation.
The mutual equity participation is the cross-shareholding between the two parties. Specifically, the domestic company that is the dominant party in the merger does not implement a wholly-owned acquisition of the foreign enterprise when acquiring the foreign enterprise, but instead gives up a small portion of the equity of the domestic enterprise, which is held by the merger party. This will offset some of the acquisition funds.
Liang Xunqi, honorary chairman of the China Machine Tool Industry Association, believes that if the merger is successful, some of the ideas can be used for reference by other companies in the industry.
Yan Ying, general manager of Shanghai Machine Tool Co., Ltd. said in an interview with the reporter that in this way, the company is not a simple overseas merger, but a strategic alliance with the acquired party. There are at least a few benefits to this: reducing cash flow, reducing risk, strategic cooperation, upgrading brands, and introducing advanced management. In addition, local German companies have strong self-respect and are hard to accept being merged. It is easier to accept this form of strategic cooperation.
From the voice of the company's leading voice, it can be clearly seen that this overseas M&A project will soon come to the fore.
Merger object
Industry insiders speculate that the target of the domestic enterprise is the German ABA company, and the German ABA company is one of the four largest surface grinder manufacturers in Europe. Over the years, the domestic slow-feeding forming mill market has been occupied by foreign production plants such as ABA, ELB, BLOHM and MAEGERLE. Therefore, this time who will become the new owner of the ABA, the industry is extremely concerned.
Although domestic grinding machine manufacturers have successively introduced a number of slow-feeding forming mill products since the 1980s, there are still large gaps in key technologies such as grinding wheel dressing and machine tool control technology, so they have not been able to open the market. In this way, domestic military industry, precision processing, and IT industry urgently need high-grade CNC slow-feeding forming grinding machines from abroad.
According to this analysis, domestic grinding companies are interested in ABA is also a matter of reason. On the other hand, as the only group company in the world that can provide comprehensive grinding solutions, Schleifring has been operating frequently in the Chinese market in recent years. At the end of May 2005, the company established a manufacturing base in Taicang, Jiangsu. . This undoubtedly shows the determination of the group to deepen the Chinese market. This is one of the reasons why ABA is willing to throw olive branches to Chinese companies.
For the ABA, Yan Ying admitted that he did not know much. He believes that as a well-known manufacturer of surface grinders, ABA products have always had a market, but its manufacturing costs are high, which is the main reason why ABA is difficult to sustain. If the domestic enterprise is successful in the merger, it can reduce the cost by integrating. For example, the domestic labor cost is almost 1/20 of that of foreign countries. However, domestic domestically purchased parts are often 10% more expensive than foreign companies. -15%, if the overseas purchasing parts procurement advantage is combined with the domestic labor cost advantage, the company's products have a very strong cost performance advantage.
M&A intention
As Yan Ying said, for this domestic machine tool enterprise, the first condition for choosing ABA should be the product matching, so as to ensure that the two parties can share customer resources and know-how, and conditionally carry out technical docking between the two products, thereby promoting The technical improvement of enterprise products.
Obviously, this technological improvement is crucial for Chinese machine tool companies to become bigger and stronger. First, the competition among domestic machine tool companies will only become more and more fierce. Without technical advantages, it will be difficult to be in an invincible position in the market. Second, China has become one of the largest machine tool markets in the world. This market is also an international market, and foreign machine tool giants will never stand by.
Mei Lan, chief representative and sales director of Schleifring Group in China, believes that although Europe is still the main market of Schleifring, China is a very promising market for the Schleifring Group. In particular, the rapid growth of high-tech industries such as automobiles and parts, aerospace and other industries will drive the demand for grinding machines. Among them, cylindrical grinders, surface grinders and tool grinders have the fastest growth.
It is based on this understanding that Schleifring has been looking for domestic partners in the past year. After many visits, there is still no finale. The industry believes that with the influence of the company in the industry, it is not difficult to find a partner. The slow progress may be due to the harsh conditions: one requires holdings and the other is not to accept the opponent's assets.
As a result, some companies have retired. Because after years of hard work, companies with good domestic performance have also established their own brands, and now they are fully committed to the international market, so naturally they are not willing to commit themselves.
Liang Xunzhen, who knows more about the negotiation process between the domestic company and the ABA, told reporters that he has not said too much because the matter has not yet settled. However, he said that although the company has made some achievements in its own industry, it is still relatively small in the world. How to use its own fist products to expand the brand's influence is also an urgent problem for the company.
Weighed the pros and cons of many parties, it can be said that if the machine tool company goes out smoothly, it will be a good thing.
Machine tool industry overseas mergers and acquisitions
At the annual meeting of the machine tool industry held recently, the leader of a domestic machine tool company said in a meaningful statement: "In the near future, we will have some big moves to promote the development of the company." It did not disclose the details of the company's ongoing overseas M&A projects, but the reporter learned from other sources that the M&A method chosen by this company is generally different.