How Should Chinese Enterprises Arrange Their Overseas Acquisitions?

According to the world clothing shoes and hats net,

Announced that it spent 320 million yuan to invest in Karl Lagerfeld Greater ChinaHoldings Limited (Carle Lagrange Greater China Development Limited, hereinafter referred to as "KLGC") 80.1% stake and the corresponding shareholder loans.

KLGC is

Karl Lagerfeld has the same name as its own brand. He has a very localized name, "Lord Buddha".

"Old Buddha" has pushed FENDI to the forefront of high fashion, and has been an international brand designer such as Chanel and Chloe. He said that he is the most qualified designer in the fashion industry. It is obvious that his name brand Karl Lagerfeld has always been on the international luxury line.

This acquisition is a sensation.

In fact, the seven wolves invested in many international fashion brands earlier. Recently, it was reported that the seven wolves are competing with Fosun to compete for the luxury brand Bally. Bally is an old luxury brand in Switzerland in 1851, mainly based on leather shoes and bags.

However, the price of the seven wolves seems to be quite calm.

The seven wolves seem to be carrying out a far-reaching reform. These are just the beginning of its all-round pformation. The question is whether the Chinese indigenous people can marry the European nobility and want to go to the international alliance successfully.

In fact, the acquisition was not achieved overnight.

To go international, the seven wolves can spend a lot of money trying.

In order to expand the popularity of the brand in the international fashion industry, the seven wolves also had a good view of the fashion show in Milan.

KarlLagerfeld has not been deeply branded in China, and the promotion of products is not enough. "Lord Buddha" himself also realized that the upgrading of China's consumer agencies and the huge potential of consumer groups began to attach importance to the development in China.

But trying to expand consumer groups in the Chinese market must rely on China's strength.

In fact, in recent years, the overseas brands of enterprises have been surging with frenzy, and real estate, finance, technology, entertainment, household appliances and clothing movements are not to be outdone.

Data show that in 2015, Chinese enterprises acquired overseas brands up to 103 billion US dollars. As of April 2017, the scale of overseas mergers and acquisitions by Chinese enterprises and individuals reached US $92 billion.

Mr. Li Weijie, partner of DDT management consulting and merger consulting service, once said: "over the past 5 years, the scale of overseas mergers and acquisitions of Chinese enterprises has been growing rapidly. The survey results show that about 90% of the surveyed enterprises are optimistic about the growth of China's overseas M & a business, but the growth rate may slow down."

Overseas acquisitions are mainly to meet the strategic needs of their own development. According to the survey, acquiring key capabilities and intangible assets, quickly entering new markets, optimizing business combinations and expanding market share are four driving factors of overseas mergers and acquisitions.

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How should Chinese enterprises arrange their overseas acquisitions? Or how should they make strategic plans?

Brand diversification

The brand diversity here is not to create multiple brands, but to attract more layers of target audiences through brand optimization and upgrading.

The process of brand diversification is a process of "Introduction" and "going out".

Bring the advanced brand operation concept and rich brand culture resources into the brand, enhance brand awareness and influence in the country, and then realize the brand going abroad and facing the world.

A strategy of brand diversification is to acquire foreign brands with high popularity, high technology and high culture, and use it to dominate the domestic market.

The most famous is Shanghai electric group, which spent 23 million US dollars to acquire the famous Japanese printing machinery manufacturer AIC and all its color printing equipment technology.

Enterprises usually seek the global targets that can satisfy these demands by taking the huge demands of Chinese consumers in various fields as the coordinates.

In the process of seeking a request, it is the key to match business partners.

Pay attention to the complementarity of two or more brands, make up for each short board to meet the needs of consumers' differentiated products and services. Pursuing diversification does not mean abandoning the main culture. Otherwise, it is easy to interfere with cognition. This is also one of the purposes of Haier's purchase of SANYO.

Upgrading of enterprise development strategy

The strategic upgrading of the seven wolves is upgrading from industry to "industry + investment", and investment drives sales.

In fact, the strategy of acquiring investment and promoting sales has been successfully carried out long ago. Dongfang communications company is a telecommunications equipment manufacturer in Shanghai. It has acquired 19% of the shares of California Interwave company, which has been listed on NASDAQ.

Interwave is mainly engaged in GSM/GPRS network equipment production and system solutions.

As part of the contract, Interwave will buy $25 million worth of equipment from Dongxin every year.

Enterprises focus on acquiring resource based brands

The resource brand here refers to the core service enterprises, and foreign media reports that Chinese enterprises are planning to acquire four German auto parts suppliers and automobile equipment manufacturers.

The four German companies involved are long-term services for the automotive industry.

Two refers to R & D resources.

BOE has invested 30 million 800 thousand US dollars in acquiring modern display technology Co., Ltd., a wholly owned subsidiary of Korea modern group.

Modern display technology produces TFT-LCD displays, which are mainly used for notebooks, desktop computers and televisions.

After purchasing modern display technology, BOE has become the world's ninth largest TFT-LCD display manufacturer.

The three is customer resources.

In March 2017, the seven wolves announced that they invest in shares of Hong Kong listed "weekend pictorial" parent company modern communication group Affiliated Companies modern digital.

In China, there is a saying: "first-class enterprises sell culture, second class enterprises sell science and technology, and three generation enterprises sell goods."

The culture here refers to the brand influence, including the existing and potential customer resources and the "right to speak".

Avoid speculative expansion of overseas acquisitions.

Jiang Nan Chun said: takeovers and mergers are addictive matters. Don't buy them for acquisitions.

You know, the Focus Media of Jiangnan Chun once was short of overseas institutions because of the large-scale acquisition and merger, and the share price went down and down, so the company was in deep trouble and finally delisted from the US stock market.

Capital is very sensitive. Most of the enterprises that buy overseas assets have the purpose of avoiding risks. Some enterprises even invest in speculation.

In 2015, the price of domestic assets was too high and the yuan was expected to depreciate. Such a fresh meat would not be missed, and people would always be greedy.

Two years later, the risk of overseas investment is frequent. Wanda Wang Jianlin spent 3 years, and finally lost two hundred million of the Spanish building.

In 2017, even Wang Jianlin, the richest man, publicly announced that he decided to put the main investment in China.

Since the 70s of last century, the Japanese economy has entered a period of steady and rapid development, and smoothly adjusted the industry.

The European and American economies were hit by the impact of the oil crisis, and Japanese companies claimed that they had bought half of the US.

MITSUBISHI bought the Rockefeller Center, a proud national historical landmark, for $1 billion 400 million. In September 1989, Sony Corp bought the Columbia film company at a high price of 3 billion 400 million dollars, and later renamed it SONY image entertainment. Soon after, Panasonic bought MCA.

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It is not hard to see that some enterprises in Japan are obviously speculative in their overseas acquisitions. In the strategy of overseas acquisitions, enterprises should keep a long-term perspective on development and take the long-term development of enterprises as an indicator.

The final outcome is Japan's overseas acquisition, which eventually becomes a bubble.

Understanding the development cycle of the target and refusing to be a "disc player"

It is the only way to develop the international market with excellent brands, advanced technology and diversified channels to develop the international market. The overseas enterprises acquired by Chinese enterprises have paid great capital, and should consider the life cycle of the standard assets at the time of acquisition, and many enterprises entering "middle age" should be careful and rational choice.

The key is that even in domestic investment, there are many risks. The risk of going to sea is even more profound.

For example, the acquisition of the Spanish building by Wanda failed. The Focus Media's crazy takeover brought the company into trouble. Bosideng spent 35 million pounds on the shop in London. After 5 years, the company left behind. The failure of Chinese enterprises to go to sea was everywhere. So we need to be cautious about going out to sea.

So, in Dickens's Shuangcheng book, this is the best and the worst of times. This is the age of wisdom. This is the age of foolishness. This is the time of belief. This is the time of doubt.

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