The acquisition of Delphi brought Shougang Corporation (“Shougangâ€), which seeks a strategic transformation, into the playground of the automotive industry.
Beijing Jingxi Heavy Industry Co., Ltd. (hereinafter referred to as “Jingxi Heavy Industryâ€)’s US$100 million acquisition of a serious loss of the US auto parts giant Delphi is currently awaiting the review of the Southern Bankruptcy Court in New York City. The hope of the final deal in this exclusive agreement is obviously greater than the possibility that it will be rejected.
Why is Shougang's last shot at Delphi Delphi, not Beijing Automotive Industry Holding Co., Ltd. (Beiqi Holdings)? Previously, Beijing’s car strategy was always implemented through BAIC Holdings, and it was once one of the protagonists of the rumored acquisition of Delphi.
How will Beiqi Holdings deal with this rising Jingxi Heavy Industry under the nose?
Shougang transition strong entry
Jingxi Heavy Industry was formally incorporated in Beijing at the end of March 2009. There was only one reason and purpose for its birth. It was to acquire Delphi. In its 800 million yuan registered capital, Shougang invested 408 million yuan, accounting for 51% of the total capital, Beijing Fangshan Asset Management Company invested 200 million yuan, accounting for 25% of the total share capital, Baoan Investment Development Co., Ltd. invested 192 million yuan , accounting for 24% of the total share capital.
According to reports, during the entire acquisition of Delphi, Tianxi Group, an indirect shareholder of Beijing West Heavy Industries, has been the main trader and has been brewing for two years. After the establishment of Jingxi Heavy Industry Co., Ltd., Tianbao Group was at the front desk and Shougang has always been low-key.
According to an introduction by a person close to Beijing West Heavy Industries, although the controlling shareholder of BWI is Shougang, the management at this stage is mainly responsible for Baoan Investment Development Co., Ltd. under the Tianbao Group. Therefore, the two sides must conduct adequate exchanges and communication in order to lay a solid foundation for smooth cooperation in the next step.
On April 15, Shougang Party Committee Secretary, Chairman Zhu Jimin and General Manager Wang Qinghai visited the Beitai Automobile Industry Co., Ltd. in Beijing's Yizhuang Development Zone. This included the chief accountant of Shougang, who was the chairman of Beijing West Heavy Industries. Fang Jianyi.
As the actual controller of Beitai Automobile Industry Co., Ltd., Tianbao Bao, chairman of Tianbao Group, also said that he would cooperate sincerely. As the hometown of Zhou Tianbao's Anhui, Zhu Jimin also stated: "The two sides should study the significance and role of cooperation from a higher level...We must strive to become the industry leader and make greater contributions to the development of the national automobile industry."
Shougang said in an interview with the Times Weekly reporter that the establishment of the Westing Heavy Industries' acquisition of Delphi's technology is an important opportunity for Shougang to carry out industrial upgrading and strategic adjustment. Chen Bingyan, deputy director of the Policy Research Office of the China Association of Automobile Manufacturers, said that steel and automobiles are two industries that are highly related. For Shougang, the vertical extension of the main business is always more successful than horizontally.
Compared to other large state-owned steel companies, Shougang’s desire in the automotive industry was not obvious in the early years. It only had one Yantai Shougang Dongxing (Group) Company, which produced the world’s highest technical automotive air conditioner. Shougang also invested RMB 500 million as equity capital in Beijing Hyundai Motor Co., Ltd., becoming the second largest shareholder of Beijing Hyundai Motor.
Zhu Jimin had told the media earlier that the purpose of Shougang’s entry into the auto industry was indeed to seize the opportunity of the rapid development of the auto industry and share the high profits of the auto industry, but the main purpose was to develop steel grades needed for automobiles and to pull Shougang. In the materials industry and parts manufacturing industry, Shougang is confident in the development prospects after entering the automotive industry.
Beiqi Holding Increases M&A
After Shougang has entered the auto industry, it aims at the parts and components that are more in line with its own advantages. According to the plan, Beijing West Heavy Industries will build Beijing's high-end auto parts industry base in the Doudian Industrial Zone, Fangshan District, Beijing. Fangshan District expects the company's construction. After it is put into production, it will become an important automobile industry base in southwestern Beijing, and it is expected that the annual sales revenue will reach 3 billion yuan.
Analysts said that BAIC has always been a leading company in the automotive industry in Beijing. Over the years, it has been exercising its strategy for the automotive industry in Beijing. This time, Shougang Holding, which has no experience in the parts and components industry, has completed the acquisition. That has always been an effort to integrate Beijing Automotive. What is meant by BAIC in the industrial chain is of particular concern.
In fact, after entering the market rumors about the acquisition of Delphi after 2009, Beijing Automotive Holdings has been in existence. Although there is no public channel confirmation, the media has also reported that Beijing Auto Holding’s insiders acknowledged the purchase of Delphi. The media even said that the assets purchased by both parties are Delphi's suspension and braking systems.
Wang Da, general manager of BAIC Holdings, said recently that based on the current global downturn in the auto industry, BAIC is planning mergers and acquisitions of foreign companies, especially parts and components suppliers. By the end of this year, BAIC will have some gains in international mergers and acquisitions.
The above analysts said that even more surprising is that after the Beijing Automobile Group’s acquisition of Beijing West Heavy Industries was exposed, it was also frequently releasing information on the integration of Beijing auto industry component resources. Beijing Commercial Daily reported that on April 13th, Xu Heyi, chairman of Beijing Automotive Industry Corporation, made it clear that Beijing Auto Holding planned to integrate the industrial resources in the Beijing area and the system this year to synchronize domestic and international mergers and acquisitions.
Beiqi chairman Xu Heyi said at the “2009 Shanghai Auto Show Summit†on April 19 that BAIC will improve the automotive industry chain and plan to increase mergers and acquisitions, joint ventures and cooperation while developing the parts and components industry.
After the integration of Beiqi Hyundai, Beiqi Mercedes-Benz and Beiqi Foton, Beijia, a veteran automobile group with more than 50 years of history, officially proposed the goal of building a multi-billion-dollar enterprise group in 2009. It is necessary to strive for the end of 2010. At the beginning of 2011, it entered the ranks of Fortune 500 companies. Its goal is being realized. In the first quarter of 2009, BAIC Motor achieved sales of 251,000 vehicles, an increase of 17.4% year-on-year.
At the same time, under the macroeconomic background of the country’s stimulus to the economy, Beijing Auto Holding will receive 100 million yuan in capital injections. Under the guidance of the huge expansion plan, these funds will inevitably be invested in addition to the construction of independent brands. For mergers and acquisitions at home and abroad. The market has recently been concerned about whether Beijing Automotive Holdings acquired some of Delphi and Chrysler assets.
Now, the protagonist of the acquisition of Delphi has become Shougang. It is not known to the outside world whether Beiqi Holdings will continue to look for its interest in Delphi.
The government is behind the scenes
People have noticed that after the relocation of Shougang from Beijing, Beijing Auto Holding will assume the status of a leading pillar company in Beijing, and for Shougang in the transition period, it is now necessary to re-arrange its living space in Beijing. The auto industry is an opportunity.
Chen Bingyan, deputy director of the Policy Research Office of the China Association of Automobile Manufacturers, said that the specific intentions of the government are not yet clear when Beijing West Heavy Industries is established outside of BAIC. However, it is also possible to note whether the business scope of BWI can be effectively linked to BAIC. Because the parts and components industry is usually centered around the entire vehicle production base, the supporting functions of the products are crucial.
According to the agreement between BWI and Delphi, the acquisition will include Delphi's global suspension and brake technology R&D and production systems, with 8 plants in China, 5 major technical centers and 14 technical support and customers. Service Center. At the same time, Jingxi Heavy Industries has undertaken more than 40 global customers including high-end car customers such as Citroen, Volvo, BMW and Mercedes-Benz, and has directly brought in orders of more than 500 million U.S. dollars a year, which is expected to reach 5 years later. About 800 million U.S. dollars of market orders each year.
As a company that once won the title of the first joint venture of the Chinese automobile industry, Beijing Automotive Holding Corporation now has a market share of less than 10% that has not been able to satisfy the government, and structurally, the Beijing automobile industry has always been a shortcoming in the development of the car market. Parts are also a "heart disease." On the other hand, these parts and components companies are small and decentralized, lack of economies of scale, and the integration and reorganization of parts and components are also considered more pressing issues in the industry.
Beijing has formulated plans for accelerating the development of Beijing's auto industry in response to these shortcomings. It will build five automotive industry parks: high-end parts parks, high-end automotive electronics parks, automotive design and research parks, special-purpose vehicle manufacturing parks and parts and components trading parks. The injection of RMB 10 billion into Beiqi Holdings can also be said to be the government's determination to make the auto industry bigger and stronger.
Beitai Automobile Industry Co., Ltd. earlier told reporters of the Times Weekly that the Tianbao Group is planning to promote industrial development in the form of a strategic alliance with the support of the Beijing Municipal Government. It seems that the emergence of BWI is precisely implementing this strategic concept.
The aforementioned person close to BWI said that in the process of acquiring Delphi, the government has always played a role in drawing up a match and bridging. Finally, pulling in Shougang as a strategic investor is also a result of the government's cooperation. As for the story of Shougang and Beijing Auto Holding behind the acquisition, analysts said that it is not ruled out that Beijing West Heavy Industries may have some connection with Beiqi Holdings in the future.
Chen Bingyan believes that the appearance of BWI is a beneficial attempt for state-owned capital control and private capital operation. Li Haiying, an analyst at Anbang Securities, said that Jingxi Heavy Industry, a government-led overseas merger and acquisition case, embodies what government departments know they are buying, and is learning to use the right methods and means to promote cooperation between companies.
According to the U.S. schedule, whether BWI’s agreement to acquire Delphi will be approved at the end of May and then be completed before the end of the year. Since then, Jingxi Heavy Industry will invest in Beijing's Fangshan District to build a Beijing high-end auto parts industrial base with a total area of ​​about 5 square kilometers, form a complete and core competitiveness auto parts industry cluster, quickly enter the chassis system, power system , automotive electronics and other core areas.
Manual Chain Hoist,Electric Chain Hoist Co., Ltd. , http://www.chropehoist.com