The road to overseas mergers and acquisitions is difficult

Editor's note: The machine tool industry has once set off a wave of overseas mergers and acquisitions, and then seems to be calm, but the exploration of overseas M&A by machine tool companies has not been interrupted, looking for the most suitable M&A opportunities.

The machine tool industry has once set off a wave of overseas mergers and acquisitions, and then seems to be calm, but intermittently will hear the news of overseas mergers and acquisitions of industry companies. Is the enthusiasm of industry companies overseas mergers and acquisitions already extinguished? The answer is obviously no.

In fact, the exploration of overseas mergers and acquisitions by many industry companies has not been interrupted. Today, when the core technology is king, the innovation of product technology depends entirely on its own accumulation, which will greatly affect the development speed of the enterprise, through the introduction or cooperation. Ways to expand the source of technology has become an inevitable choice for enterprises.

Overseas mergers and acquisitions undercurrent
Here is an example of a 2010 overseas acquisition.

It is reported that the international leading technology obtained by Chongqing Electromechanical Group after acquiring the British “100-year-old shop” PTG will soon be used in the machine tool industry. Recently, the environmental relocation project of Chongqing Machine Tool (Group) Co., Ltd., a wholly-owned enterprise of Chongqing Electromechanical Group, was officially launched. Zhang Zhiming, chairman of Chongqing Machine Tool Group, revealed at the groundbreaking ceremony of the new plant that they will transplant the advanced technology of British PTG Company and build a large-scale precision CNC machine tool industry base with an annual output value of more than 5 billion yuan in the tea garden new area, with a total investment of 1.85 billion yuan.

In March 2010, Chongqing State Electromechanical Co., Ltd., a state-owned holding company, acquired the entire share capital of six companies of PTG for £20 million in cash.

Chongqing Electromechanical Co., Ltd. is the largest integrated manufacturing industrial enterprise in western China. Its Chongqing Machine Tool Group is still the largest manufacturer of complete sets of dental equipment in China and the largest manufacturer of gear processing machines in the world. The company will acquire three British machine tool industry companies after acquiring two core subsidiaries of British PTG, Holroyd Precision Limited, Precision Components Limited, and PTGHeavy Industries Limited. Brand: Holoyd Holroyd, Bins Barry Binns & Berry, Crawford Swift Crawford Swift.

It is reported that the acquisition will enable Chongqing Electromechanical to obtain international advanced technology for the development, design and manufacture of four main products such as screw machine tools, screw processing of various types of lines, gear grinding machines and large machine tools. Chongqing Electromechanical believes that this acquisition will shorten the company's related industrial technology and international advanced level by 15 to 20 years, and thus stand at the forefront of international related industries.

In fact, in the interview, the reporter learned that many large-scale state-owned enterprises and private enterprises with certain strengths, such as Shanghai Machine Tool Plant, Wuhan Heavy Machine Tool Group, and Beijing No. 1 Machine Tool Plant, which have had successful M&A experience, have been Overseas companies maintain close contact and seek suitable overseas M&A opportunities in their contacts.

It should be said that there are many companies with overseas M&A plans, but there are not many companies that actually put into practice. For business operations, overseas mergers and acquisitions are really a risk-making decision, so all companies are very cautious in overseas mergers and acquisitions. This is also the reason why there are many ideas for overseas mergers and acquisitions, and there are few reasons for doing so.

Overseas mergers and acquisitions are more difficult
Recently, Wu Bolin, executive vice chairman of the China Machine Tool Industry Association, spoke to reporters about the overseas mergers and acquisitions of the machine tool industry and expressed his views.

He said that cross-border M&A is of great significance for the development of China's machine tool industry. Various departments of the State Council also require the machine tool industry to take the lead and continue to expand the expansion of China's machine tool industry abroad. Participating in international mergers and acquisitions and using international platforms is very conducive to rapidly improving the management level and scientific and technological progress of the industry, and is conducive to participating in world competition. Dalian Machine Tool, Shenyang Machine Tool, Beijing No. 1 Machine Tool Plant and other companies have successful examples of cross-border mergers and acquisitions. However, from the current situation, the difficulty of mergers and acquisitions is getting bigger and bigger compared with before the financial crisis and before the financial crisis. The specific performance is as follows:

First, from an economic perspective, M&A prices are getting higher and higher. This is mainly because the financial crisis is about to pass and the world economy is beginning to recover. People have seen a new round of hope.

Second, as the Chinese manufacturing industry continues to grow and develop, the West is feeling more and more stressed. In order to prevent greater threats to their own economies, some countries have tightened the blockade and controlled the export of their enterprises as an important means. It is understood that Japan and Europe have introduced corresponding policies.

In addition, companies can't “go out” in order to “go out”, but they must be fully prepared. There are many places where companies need to pay attention and think.

The first is to analyze whether it is cost-effective in terms of input and output.

In addition, technically, the purpose of cross-border M&A is to improve our own technical level with its platform. However, whether its technology can be quickly transferred and digested in time is worthy of scrutiny. In many cases, property rights transfer after cross-border mergers and acquisitions, but there are obstacles to technology transfer, because some core technologies are not allowed to use. For example, Beijing First Machine Tool Plant's acquisition of Coburg in Germany, Coburg's many core technologies, there is no problem in Germany, but it is not allowed to get China, because the local government is not allowed to use any technology. Clearly stated. Similar regulations are available in Japan and the United States.

From the perspective of management, enterprises must have the ability to control it. Mergers and acquisitions are completed. While enjoying the benefits and exercising power, enterprises must also comply with local laws and regulations and fulfill their corresponding obligations. Whether these laws and regulations have been thoroughly understood, and whether there are any traps, are places that need attention.
 

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