Merger And Acquisition: Three Level Jump Of Chinese Enterprises

Can not afford to buy

According to the statistics released by Japan's empire database in July 8, 2010, as of the end of June 2010, 611 Japanese companies that acquired and invested in China, including 323 retail outlets, accounted for half of the total number of Japanese companies.

There are 69 Japanese manufacturing companies bought by China.

Imperial database analysis shows that "Japanese companies have high value in terms of technology strength and brand effect.

In the future, if the renminbi continues to appreciate and China's purchasing power continues to grow, then the speed of buying Japanese enterprises will also increase. "

From the time and quantity of purchase, after 2009

Several experts interviewed by the national finance weekly think that the period of strategic opportunities for Chinese enterprises to acquire Japanese enterprises has arrived from the perspective of China's economic development.

However, the arrival of the strategic opportunity period does not mean that the acquisition of Chinese enterprises in Japan will be smooth sailing.

After figuring out whether the Japanese takeover companies are in line with their needs, the M & A activities of Chinese enterprises are also faced with many political and economic factors.

Mergers and acquisitions

In the case of Chinese enterprises purchasing Japanese enterprises, the most recent reaction in Japanese society is Shandong's Ruyi (15.15, -0.15, -0.98%) purchasing prestige company of Japanese famous brand clothing enterprises.

Tokyo, in July 29, 2010, held a temporary shareholders' meeting in the restructuring period of RENOWN.

The meeting decided that the prestige company will implement the third party private placement to Shandong Ruyi Technology Group Company (hereinafter referred to as "Shandong Ruyi") and accept 3 Chinese directors.

Ruyi reorganization prestige

As an old brand clothing company in Japan, prestige maintained good performance during the Japanese bubble economy, but after the Japanese economy fell into a long-term downturn, the company also failed.

Prestige hopes that the reorganization of Chinese enterprises will be achieved after they have joined the stock market, so as to enhance their financial system and expand their sales in China and other Asian markets.

According to the agreement, prestige will extend 4 billion yen (310 million yuan) shares to Shandong.

Shandong Ruyi will hold 41.18% stake to become its largest shareholder.

Two, the company plans to set up a joint venture in Beijing to sell its brand name clothing such as "simple life" in China, and strive to increase its store to 2000 in 10 years.

Shandong Ruyi owning more than 1/3 of its shares has a veto on the important decisions of the company in its shareholders' meeting.

According to the 2010 3~5 monthly report, which was announced in July 14th, its sales volume was 17 billion 300 million yen, and its operating profit was 1 billion 300 million yen.

Because of the restructuring of shops and so on, the two amount has been reduced by nearly half, and the situation is not optimistic.

A female shareholder attending the shareholders' meeting said: "the time honored enterprises are under the banner of Chinese enterprises.

But now it is the age of globalization, and we hope that we can take the initiative with the help of Chinese enterprises.

Shandong Yuli Group Chairman and CEO Qiu yah Fu, in an exclusive interview with the Tokyo financial weekly, said that the purpose of Shandong's acquisition is to pform from a dominant textile enterprise into an internationally famous fashion industry group for the sake of strategic pformation.

Shandong Ruyi has textile technology, has high-end fabrics, has the Chinese market, but what is missing is brand.

Prestige has a history of more than 100 years. There are ten famous brands, with annual sales volume of ten billion yuan.

In Japanese words, no one in Japan is Japanese if he doesn't know his reputation.

The popularity of Ruyi acquisition has attracted wide attention in Japan.

In May 24th, in a press conference announcing the intention of asset restructuring, all mainstream media in Japan sent reporters to the scene, and about 100 journalists attended.

The shareholders' meeting in July 29th, the Japanese media and the international media in Japan are also very concerned.

Sun Tianfu, a consultant who always focuses on mergers and acquisitions in China and Japan, told reporters in the finance and economics weekly that Shandong is willing to make woolen clothes, but also to make clothes.

From this point of view, Shandong is willing to acquire brand, advanced management methods, both domestic and foreign.

They had been looking for other companies before, but they didn't talk about it.

After that, the conditions of Japanese prestige are just in line with what they want, a good brand and a advanced management model, and they are the target of their acquisition, and then come together.

And there are two reasons why Japanese prestige needs to be found: one is capital; two is a market.

From raw materials to finished products, Shandong Ruyi can help the Japanese company.

This is a win-win process.

However, sun Tian Fu added that the process of China's acquisition of Japanese enterprises was successful at present, but there were many cases of unsuccessful cases.

Although many experts believe that this is a good time for Chinese enterprises to buy in Japan, they also warn that there are many Japanese SMEs seeking to be merged, and Chinese enterprises should not rush into the herd.

Accelerated mergers and acquisitions

In the case of bankruptcy or bankruptcy, some Japanese enterprises are becoming an option for Chinese enterprises to survive and develop.

According to the statistics published by Japan's imperial database in July 8, 2010, as of the end of June 2010, 611 Japanese companies were bought and funded by Chinese enterprises, of which 323 were retail stores, half of which were purchased from Japanese companies.

There are 69 Japanese manufacturing enterprises bought by Chinese enterprises.

Imperial database analysis shows that "Japanese companies have high value in terms of technology strength and brand effect.

In the future, if the renminbi continues to appreciate and China's purchasing power continues to grow, the pace of buying Japanese companies will also increase. "

The merger cases mentioned by Japanese media include: the Shanghai Electric Group purchased the Dongshan pharmaceutical company in 2002; the 39 group purchased the East Asian Pharmaceutical Company; the 2004 Shanghai electric group collected the PHENIX sports clothes; after 2009, China Petroleum acquired the 49% stake in the new Japan Osaka refinery, the acquisition of Laox by the Suning Electric Group, the acquisition of SJI by the Legend Holdings Group, the acquisition of the nixing motor industry in Ningbo, the acquisition of the golf tournament by the Chinese Merlion group, the acquisition of the Shandong Ruyi acquisition, the acquisition of the BYD forest factory, the acquisition of the hot sea hot spring hotel by the CMIC, the Japanese legal person "Hua Cheng Japan" of the Chinese enterprise, and the acquisition of the hot spring hotel, Hamilton, Yu Li Zhi Ye.

From the time and quantity of acquisition, the number of acquisitions after 2009 is higher than the total number of acquisitions over the past 7 years.

In 2009, the acceleration trend of Chinese enterprises purchasing Japanese enterprises was accelerated. In 2010, this trend was further extended. According to the Japan economic news, as of the first ten days of July, China acquired and invested 21 Japanese companies in 2010, which was flat in 2009.

Three broad categories

From the perspective of Japanese enterprises that Chinese enterprises have acquired, there are three main categories: technology, brand and service.

Qiu Shan, Chi Bei, SJI, nixing motor industry and hall forest factory belong to the technical category; PHENIX, prestige, and this golf belong to brand category; Laox, flower house and Hamill ton Yu Li Zhi Ye belong to the service category.

However, most Japanese enterprises acquired by Chinese enterprises are small or medium sized enterprises which have been bankrupt or are on the verge of bankruptcy.

Shanghai acquisition of Qiu Shan and Chi Bei is typical for technology acquisition.

Zhang Chunhua, the representative of Shanghai electric group, who participated in the acquisition of Qiu Shan printing machine and Chi Bei, recalled in an interview with Tokyo financial weekly magazine that the acquisition of Qiu Shan was the pfer of management rights at that time, because the original company applied for bankruptcy protection.

Shanghai electric bought the factory buildings, land, equipment and personnel of the autumn hill and set up a new company. The acquisition of Chi Bei was a private placement, and Shanghai electric became a major shareholder with a 75% share.

Both Japanese companies have a long history, their products are very advanced, developers, development platforms and processes are a whole.

After the acquisition, the decision-making power of the two companies was controlled by Shanghai electric.

Zhang Chunhua believes that the acquisition of these two companies are relatively successful.

Since the acquisition, Chi Bei has been profitable.

In the 2009 fiscal year, its performance has reached a record high, and the number of employees has increased from 100 to 200.

Speaking of the experience of acquiring Japanese enterprises, Zhang Chunhua thinks there are two points: first, after the acquisition, besides supporting the advantages of the acquired enterprises, there should be corresponding supporting resources.

At the beginning of the Shanghai electric company, except for financial support, human resources, material resources and market development were strongly supported.

The purpose of Shanghai electric acquisition is, of course, Japanese technology, but before the chicken lays eggs, it is necessary to restore the ability of the chickens to lay eggs.

In a more conservative place like Japan, if you don't win the basic trust, it's hard to get the core stuff.

Secondly, we should have an in-depth understanding of Japan's "craftsman culture" and merge with the Japanese.

Zhang Chunhua believes that Japan's technology can not be reflected in the drawings, it is still "craftsman culture", mainly in the minds and hands of people.

If the Japanese heart is not to you, even if the ownership is yours, he will not do it well for you.

Chinese enterprises must be familiar with this culture.

Shanghai Electric has acquired dormitories in the acquisition of Chi Bei, and in the past two years, people in Shanghai electric have been living with them, opening their hearts on time and patience.

It is not appropriate to rush forward.

From the perspective of China's economic development stage, the strategic opportunity period for Chinese enterprises to acquire Japanese enterprises has arrived.

Several experts interviewed by the financial weekly magazine hold the above view.

Experts believe that Japan is not only close to China, but its economic development level is suitable for the acquisition plan of Chinese enterprises.

For example, in the retail of home appliances, Japanese retailers are still in the stage of intense competition, and the United States has completed this stage, almost entering oligopoly state, has formed a large monopoly group, and has not so many competitors.

The US has already crossed this stage, so it is difficult for China to find a matching acquisition target in the US.

Sun Tianfu, who is familiar with Japanese enterprise mergers and acquisitions, said that China's economy has reached the stage of re integration, and Japan is also facing pformation.

There are more than 10 famous household appliance retailers in Japan, but the market will not tolerate so much.

And in these Japanese enterprises that are facing elimination, there are some things that China needs, such as management.

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Sun Tianfu said, "Chinese enterprises should go to Japan to buy."

Judging from the strategic investment of Chinese enterprises, the acquisition of Japanese enterprises, especially the management system of acquiring Japanese enterprises, means very large business opportunities.

Zhu Xiaolin, senior analyst at Shanghai Pacific International Strategy Research Institute, told reporters in the finance and economics weekly that Chinese enterprises' "going out" strategy investment mainly includes five parts: resources, technology, brand, management and market.

Although Japan has no resources, its technology is advanced, its management is advanced, its market is huge, and its international brands are numerous.

Some experts told reporters that through the analysis of the recent one or two years of acquisition cases, the introduction of Japanese technology is not the most important, including Suning Appliance and Shandong Ruyi mergers and acquisitions have nothing to do with technology, the key is in management.

Sun Tianfu said that in the current stage of economic development in China, the introduction of management is more important than the introduction of technology.

This is because the upgrading of industry is essentially the innovation of management mode.

The introduction of new management mode is in line with China's new economic development stage.

Technology can be imported, but it needs digestion and absorption. At this time, a good management system is needed.

Otherwise, management can not keep up. Only technology has only short-term effects.

A new management model is a long-term mechanism for 20~30.

Some analysts say that dealing with Japan will be troublesome at the very beginning, but once the agreement is reached, it will be easy to follow up, and everything will be carried out according to the agreement.

The off-site factors of Japanese companies

A number of senior journalists interviewed by the financial weekly magazine believe that Chinese enterprises are facing more problems than the acquired enterprises in the acquisition of Japanese enterprises by Chinese enterprises. The main reason lies in:

First of all, information asymmetry, Chinese enterprises lack of understanding of Japanese and Japanese enterprises, and even there are many misconceptions.

For example, many Chinese companies believe that Japanese companies will not sell to China, but the reality is that there are too many Japanese sellers and too few Chinese buyers.

Secondly, some public opinion misleading or emotional factors override rational factors.

For example, some Chinese enterprises are worried about whether Japanese enterprises will boycott Chinese enterprises when they buy Japanese companies.

In fact, when it comes to capital relations, Japanese companies are mostly commercial in their business. They will sell well and offer to sell.

Third, there are too many pieces of information. There is a huge gap between Chinese enterprises and Japanese enterprises.

Although China has been reforming and opening up for 30 years, there has been no complete information about Japan since 1980s.

China's understanding of Japan is 00 scattered.

Sun Tianfu even thought, "now that China understands Japan and Japan, it is 1:100 to understand China."

Judging from the reaction of Japanese public opinion, it is more common for Chinese enterprises to acquire Japanese enterprises.

The media have analyzed the advantages and disadvantages of mergers and acquisitions, and many believe that the current M & A behavior of Chinese enterprises has not yet formed a climate.

Asahi Shimbun published an editorial in July 19th, saying that "it is hoped that the integration of enterprises between Japan and China will be further strengthened through mergers and acquisitions", which is certain for Chinese enterprises to acquire Japanese enterprises.

But this editorial also said, "there is a sense of vigilance in Japan's technology loss. If it is really a technology that can not be pferred, Japanese enterprises should strengthen cooperation and protect them according to the situation, government support and so on."

Thus, for general industrial mergers and acquisitions, there is not much resistance in Japan, but in some important fields and core technology fields, Chinese enterprises will surely not be able to make plain sailing for Japanese enterprises. Chinese enterprises will have some mental preparation for this.

There are four kinds of opinions in Japan: one is the fear of technology loss to China, the two is the fear of large-scale layoffs, three is concerned that Chinese people are not good at managing Japanese enterprises, and four is concerned about threatening Japan's national security.

There are also extreme views, such as that the Japanese government and financial institutions are not dying for small and medium-sized enterprises, and that China is invading Japan.

In response to media questions, Japanese scholar Watanabe Shinichi said that the acquisition of Japanese companies by Chinese enterprises is related to the financial crisis, but it is difficult to form a scale.

He said that Japanese companies have always opposed overseas mergers and acquisitions and are more strict against China, which is related to the special history of the two countries.

He said in the case of nixing motor purchase: "Japan's economic recession is serious. This company (nixing motor) has recently faced financial difficulties and has to sell shares to Chinese companies.

But Japanese companies are very emotional about Chinese enterprises, so I think this is a very special case.

Another expert analysis said that when Japan was buying abroad, it not only had strong financial strength, but also had various brands such as SONY, Panasonic, and its own management experience, but now Chinese enterprises have capital but no brands, and no management experience that can be promoted like Japan.

(reporter He Degong, Beijing correspondent Ma Xin)

Acquisition of Japanese companies: details and mentality

From the shareholding level, Ruyi has absolute influence and it is no problem to implement the will of major shareholders.

But the purpose of our M & A is not to earn a fortune through a listed company.

In Japan, I generally do not use the word "acquisition", which is different from that in Europe. Therefore, we always talk about asset restructuring, strong alliance, complementary advantages, win-win cooperation and so on.

The restructuring started in October 2009, when Japanese prestige sought to cooperate with a Chinese company in China, demanding that the technology, products, market and capabilities of the Chinese company be relatively good.

Shandong Ruyi is in its own strategic pformation period, that is, from the original Chinese made dominant enterprises to the internationally renowned fashion industry group, it is seeking to merge and reorganize the world's better brand clothing enterprises, design resources and R & D brands, and develop their own clothing design.

Japanese prestige is for clothing design and sales, as well as 29 clothing brands.

Reputation is the platform we need.

In the subsequent inspection and understanding, I found that prestige in the most high-end shopping malls in Japan is basically marketing with the world's top brands.

For example, both the brand men's clothing and accord Ge Dan are sold with brand stores such as Italy Jeni ya, and the prices of products are basically the same.

This is what I need most.

What is even more surprising is that prestige is located in a factory in Miyazaki. Under the condition of high cost in Japan, there are actually more than 400 workers, so the suit must be very high, otherwise it will not support the cost.

The cost of a Japanese worker is equivalent to the cost of 25 Chinese workers.

After several high-level contacts, it took about 4 months for both sides to reach an agreement on asset reorganization. Shandong's Ruyi's prestigious private placement shares held 41.18%, becoming the largest shareholder.

The proportion of 41.18% is in line with our development strategy.

Ruyi overseas mergers and acquisitions do not have the right to speak if they do not have the basic right to control share assets.

This ratio shows that we should have an absolute say in capital, but in essence, we do not want to control the company. Instead, we want to make the two companies do well through the combination and advantage of the two companies.

Of course, if you want to go to Japan, you will be unfamiliar with Japanese culture, business and environmental habits.

We want to lay the foundation for bilateral cooperation through the status of the largest shareholder.

Other shareholders are very small, the second largest shareholder accounts for only about 14%, and is the fund, the total number of shareholders tens of thousands.

Financial investors are mainly short-term income, and enterprises pursue long-term development. Even if they survive for 100 years, they will pursue another 100 years.

Ruyi's popularity is also in line with the interests of the second major shareholders.

Because prestige has been losing money for 10 consecutive years, stock prices have been falling on some short-term actions, such as selling some assets and brands to survive.

After reorganization, prestige is expected to turn a profit and share prices can go up. The second largest shareholders will have a lot of benefits as investors.

Therefore, the second shareholders welcomed with enthusiasm, and all decisions were voted in for the same fundamental interests.

From the shareholding level, Ruyi has absolute influence and it is no problem to implement the will of major shareholders.

But the purpose of our M & A is not to earn a fortune through a listed company.

The important thing for Chinese enterprises to develop in another country is to manage enterprises with local people.

The success of this acquisition is prestige. At present, the management team is composed of young people of 40 years old, but has rich management experience and has been growing in this enterprise.

They put forward the idea of revitalizing this century old enterprise through reform, and the idea coincides with ours.

Generally speaking, we all want to do things and our objectives are clear, but it is still difficult to negotiate from the interests of our own enterprises.

The two enterprises are excellent, so the main problems encountered in the acquisition negotiations are in the proportion of equity, corporate control, control methods, development goals, tactics and so on.

The first consideration of prestige is that after restructuring, it does not have much control over it and prevents itself from exerting itself. Therefore, it is natural to propose some relatively loose management environment and some claims that we should be masters of our own affairs.

I think this is all very important. The enterprises that have been reorganized have such mentality, and so do they in China.

In terms of future development goals, the two sides have had a difficult time.

Compared with Chinese enterprises, Japanese enterprises are very advanced in management, which leads to their strong self-esteem and some problems.

In contact, we feel the same way.

However, this condescending situation is not arrogant. It is based on some actual situations, such as its management level, refinement degree and modern management means, which is indeed more advanced than ours.

But I think Japanese companies are still lacking in the field of internationalization in terms of innovation and change.

The difference is in these respects.

However, Japanese companies have another advantage: even if the negotiations are very serious, the agreement will be very serious once the agreement is settled.

It's prestige that makes me feel at ease.

The prestige's original business plan was to turn around the deficit in 2014, but after we took the lead, it was analyzed that we could turn a deficit in the current financial year and end up a loss of up to 10 years.

Why? Because everyone is looking for the complementary advantages of the two enterprises in the industrial chain and market.

The finding is that the two sides can expand the market by cutting costs significantly.

After "asset restructuring" with Japan's reputation, Shandong Ruyi has a brand enterprise in Europe, and has a brand partner in Japan. Two fashion centers plus China's huge market will surely have great development. This is my "reckless plan".