On March 31, Delphi officially agreed to sell its global brake and suspension business to Beijing Jingxi Heavy Industry. The subscription agreement signed by the two parties is still waiting for the approval of the Bankruptcy Court of the Southern Bank of New York in the United States. It will eventually complete the delivery by the end of this year.
"The amount of the project is quite large, but after the approval of the bankruptcy court, an auction procedure is required. To prevent a higher bidding price, the acquisition amount is kept confidential until the acquisition process is over." BWI The person said.
However, according to Reuters, BWI is preparing to pay 90 million U.S. dollars in cash for Delphi to acquire its related machinery and equipment, intellectual property and real estate, including Delphi's brakes and suspension business at eight factories and five technology centers in the world. And 14 technical support and customer service centers.
Informed sources revealed that this acquisition will also directly bring hundreds of millions of dollars in orders each year for Jingxi Heavy Industry and more than 40 global customers such as Cadillac, Mercedes-Benz, BMW and Audi. "Because the acquisition will end long-term pending suspense, some indecisive customers may also increase orders after the delivery."
Coincidentally, Geely Automobile also successfully acquired Australian DSI automatic transmission company a few days ago. "Direct acquisition of foreign auto parts companies is one of the ways that Chinese local suppliers acquire core technologies. In the context of the financial turmoil, local suppliers will have more opportunities for overseas mergers and acquisitions," said Chen Wenkai, president of Gasgoo.com.
Another important background is that “the autonomy of key component technologies has been achieved†has been included in the planning for the revitalization of the automobile industry as one of the eight goals. The central government will also invest 10 billion yuan in the next three years as a special fund for technological progress and technological transformation. .
Government urges
The behind-the-scenes promoter of the Delphi merger is the Beijing Municipal Government. The reporter was informed that Beijing Jingxi Heavy Industry, which acquired Delphi's business, was officially listed in March this year. It is a new company jointly funded by Beijing Fangshan District Government, Shougang Group, and Tianbao Group. The registered capital is 800 million yuan, among which, Fangshan District The government holds 25% of the shares.
In fact, BWI is a consortium that caters to the needs of the development of the automotive industry in Beijing. The reporter learned that after the Delphi M&A case has settled, BWI will build a Beijing high-end auto parts industrial base in Fangshan District, Beijing, and quickly enter key components such as chassis systems, power systems, and automotive electronics.
“After the Olympics, the relocation of many highly polluting industrial enterprises in Beijing has had a great impact on Beijing’s industrial growth momentum. On the other hand, China’s auto parts industry is facing an embarrassing situation of hollowing, developing core components and forming industries. Clusters have become a strategic choice for the Beijing government,†said a person close to Beijing West.
The source also stated that the construction of this project will lay a solid foundation for Beijing's spare parts industry to enter the high-end international market, change the current pattern of China's auto parts industry, form a new capital auto parts sector, and develop China. The domestic auto parts industry is of far-reaching significance.
According to informed sources, Jingxi Heavy Industry has commissioned Tianbao Group to undertake the management of the Delphi project, and will continue to develop Delphi’s existing overseas production and R&D, and continuously develop new customers. “The current three-party team is actively integrating and planning. Post-acquisition global business operations."
"After the successful acquisition of Delphi, Jingxi Heavy Industry will fully own Delphi's strong chassis product technology, automotive technicians, technical database resources and industry experience and become one of the leading suppliers in the global suspension and braking business areas." The person familiar with the matter said that if it weren’t this financial crisis, it would be difficult for Chinese companies to buy Delphi’s so many technological assets at this price.
It is reported that the core products of BWI's acquisition include the automatic stabilizer bar system ASBS, the world's only and leading magnetorheological control suspension system MR (currently used as a technical reserve only on BMW series premium vehicles), air suspension Modules, anti-lock braking system ABS, track control system TCS and electronic stability control system ESC and other technologies.
Overseas acquisition of core technologies
Geely Automobile also launched this round of overseas technology rush war with Jingxi Heavy Industry. The DSI automatic transmission company acquired by this private automaker is one of the only two automatic transmission companies independent of the auto vehicle companies in the world. Previously, it mainly supplied the Ford, Chrysler and Ssangyong autos. It is expected that the acquisition amount will not be More than 314.7 million Hong Kong dollars.
Industry insiders believe that if it is not this financial crisis, Chinese companies will not be able to purchase these advanced international technological assets at the current price level. There will be more under the promotion of the country’s policy of encouraging the “autonomy of core componentsâ€. Chinese companies regard Bargain-hunting Overseas as the best way to obtain core technology.
Chen Wenkai believes that the acquisition of international suppliers by Chinese companies, although they can obtain core technologies more quickly and lay the foundation for the future expansion of domestic and foreign markets, there is also a considerable risk.
“The biggest risk lies in whether Chinese companies have sufficient management capabilities and technological digestion capabilities to obtain the nutrients they need from the acquired companies. In addition, these international suppliers have fallen into a state of bankruptcy or sale. All of them were dragged down by the sharp decline in vehicle sales. It is also a problem for Chinese companies to find orders after M&A, said Chen Wenkai.
According to foreign reports, DSI Automatic Transmission Co., Ltd., acquired by Geely, was hit by the biggest customer Shuanglong Motors after being taken over by the court and stopped production, and then went into bankruptcy proceedings.
A person involved in the Delphi merger also frankly stated that the risk of international mergers and acquisitions is not small. “This is not just a matter of taking over technology and factories, but also considering the management of acquired assets so that it can make money while planning for the future. Development strategy, with a little carelessness, will fall into the whirlpool of miscalculations overseas."
"For China's domestic suppliers, the way to acquire advanced technologies through overseas M&A can be tried, but risk assessment is also required." Chen Wenkai believes that the vast majority of local parts and components companies currently do not have digestion technology and The ability to manage acquired assets and rely solely on international mergers and acquisitions also makes it difficult to change the dilemma of local suppliers' lack of technical resources.
"Comparing to letting companies go overseas to risk, it's better to think about how the government creates a level playing field for local suppliers, such as breaking the monopoly of foreign investment in the auto parts market and encouraging independent brands to choose local suppliers with independent intellectual property rights. Increase the support for local companies in R&D of core technologies, etc., said Chen Wenkai.
At present, the control of foreign investment in auto parts is as high as 70% to 80%. In particular, the supply chain of Japanese manufacturers and Korean manufacturers is almost not open to Chinese domestic suppliers. Under such circumstances, it is difficult for local suppliers to obtain foreign vehicles. The technical output of the plant also lost the opportunity for common development with the vehicle company.
According to Li Haiying, an analyst at Anbang Automotive, “Encouraging the autonomy of key component technologies†is one of the most exciting ones in the revitalization planning of the automobile industry. “This is unprecedented attention paid by the auto parts industry at the policy level. However, it still lacks specific content."
“Although the revitalization plan has clearly stated that the central government must allocate 10 billion yuan as a special fund for technology research and development, the lack of local suppliers is actually the source of technology, and there are no concrete measures in this regard in the revitalization plan. Li Haiying said.
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