The two recent acquisitions hit the scene. From the background of the story, there are some similarities between the people's design and the transaction content.
Storyline: Seller sells non-core or traditional business units due to market decline, buyers expand core business through mergers and acquisitions
Personnel: The seller is an international giant and the buyer is a local Chinese company.
Transaction content: Motor business, subdivision of a small industrial motor, a vehicle starter and generator.
The main theme behind the acquisition is nothing more than transformation.
GE and Wolong Electric
One is the eldest brother of electrical and electronic equipment manufacturing, the leader of the digital industry,
One is a listed company committed to becoming the global motor industry NO.1
On December 25, 2017, Wolong Electric issued an announcement announcing its acquisition of GE's small industrial motor business for US$142 million. The acquisition involved the design, development, manufacture, distribution, and sales of low voltage and TEFC medium voltage motors from 1 to 1,750 horsepower. Hereinafter referred to as SIM), the assets mainly include 100% equity of GE Industrial Motors Mexico Co., 100% equity of General Electric Motors, and 13 other entities involved in assets and employees related to this business.
Wolong Electric has three main businesses: electrical machinery and control, transformers, and power batteries. The motor and control businesses include low-voltage motors and drives, high-voltage motors and drives, micromotors and controls.
In the first half of 2017, the motor and control business accounted for 80.93% of the main business revenue
In recent years, Wolong has made continuous efforts in the core business of motor manufacturing. Earlier the company also put forward the strategic goal of “two billions” (that is, both motor and motor drive control products have reached a scale of 10 billion production and sales). A series of mergers and acquisitions initiatives is an important means for Wolong to achieve its goals.
Wolong Electric's acquisition of SIM also signed a trademark license agreement, which means that Wolong can use the SIM window to sell its products under the GE brand to the American market, expand SIM sales channels, and sell SIM key products to the Chinese and European markets. 1+1>2 industry collaboration model.
Why does GE sell it?
On November 13, 2017, GE held an investor conference in New York and announced a new "downsizing" plan: layoffs of 25%, reduction of the board of directors, reduction of $20 billion in business, focusing only on core power, renewable Energy, aviation and medical.
In recent years, GE has successively sold financial, home appliances, lighting business, industrial solutions, water services, etc., while the railway business and oil service business are among the sales plans. For $20 billion, the $142 million transaction volume is really a small target.
Bosch and Zheng Coal Machinery
One is the world's largest automotive technology giant
One is an old state-owned enterprise engaged in coal equipment manufacturing and hydraulic support business.
On December 31, 2017, Zhengzhou Coal Mining Machinery Group Co., Ltd. ("Zheng Coal Machinery") completed the acquisition of the German Bosch Group's motor business. The acquisition includes start-stop motors and 48V weak hybrid technology with a transaction volume of 545 million yuan. EUR.
Zheng Coal Machinery is a well-known coal mining equipment manufacturer in China. In recent years, due to the downturn in the coal industry, its performance has deteriorated. Therefore, it is seeking a cross-border transformation. In 2016, Zhengji Mining acquired ASIMCO’s 6 auto parts mark companies for 2.2 billion yuan, formally forming two main operations of coal mining machinery and auto parts. The revenues of the two major segments from January to September 2017 were 34.77 respectively. Billions and 1.872 billion yuan.
Through this acquisition, Zheng Coal Machinery can obtain several revenues: First, the world's leading start and stop technology, this technology only requires each vehicle to increase the cost of more than 200 yuan, it can reduce carbon dioxide emissions by 5% to 8%. The second is the 48V weak hybrid technology. This system can recover energy during braking and use this energy to assist in acceleration, reducing CO2 by 10%-15%. Thirdly, the R&D team and R&D capabilities of the veteran auto parts giants, and the use of this gold medal signboard will help Zhengjiji develop a new energy motor technology suitable for the Chinese market.
Why Bosch sells?
The Bosch business is divided into four business areas, covering automotive and intelligent transportation technology, industrial technology, consumer products, and energy and construction technology. The starter and generator business segments are affiliated to the automotive and intelligent transportation technology business, with sales of 1.2 billion euros in 2015.
Bosch Group's revenue for 2015-2016
(in millions of euros)
According to industry analysis, the electronic chip technology is open to the world, and the technical barriers to the motor industry are greatly reduced. Bosch's technical advantages and market share in the field of electric motors have been greatly impacted, and competition pressure has been increasing. In this case, Bosch hopes to abandon the traditional motor business and devote more energy to the business related to new energy vehicles. The motor business of Bosch New Energy Automobile is not within the scope of this sale.
Is it worth buying?
In order to meet the increasingly stringent global fuel consumption targets, more and more car companies will start and stop technology as a standard new car. However, China's fuel consumption standards will be reduced to 4.9L/100km by 2020, and the EU will be reduced to 3.8L/100km. To achieve this goal, it seems difficult to accomplish with the current engine start-stop technology. So is it a baby or a chicken rib? In contrast, the RMB 100 billion market brought by the 48V weak hybrid technology is more significant for Zhengji.
To be sure, the market space that the coal industry can tap will only become smaller and smaller. Although this acquisition of Zheng Coal has not obtained the Bosch new energy-related business, it is also considered to have acquired the transitional product of the new energy automotive business and its research and development capabilities. - The driving force for further expansion in the future.
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