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LED industry can set off the tide of mergers and acquisitions 1 1> 2
As early as 2013, some experts predicted that the LED industry will have a wave of mergers and acquisitions. In this era of LED lighting, the competition has already entered a fever, and all the companies that have the ability and strength to hit the first-line brands in the industry no longer hide their ambitions, and hope to expand their competitive advantage through rapid expansion of the industry. The tide of mergers and acquisitions has become more and more fierce, and the phenomenon of LED industry division and integration has become more frequent. It will be common for a long time to be divided. The marriage between Dehao Runda and NVC is a precedent for the integration of M&A in the LED industry. Since then, M&A in the industry has continued to ferment. In 2014, there were many mergers and acquisitions in the lighting industry. Among them, there are cross-border giants waiting for opportunities to move, but also lighting giants to swallow small fish, slow fish, and more companies in the lighting industry in different areas to warm up and expand their respective advantages. Mergers and acquisitions, 1 12? First, let's take a look at some of the more famous M&A cases in the LED industry in the first half of 2014. Maoshuo Power Co., Ltd. announced at the beginning of this year that it plans to invest in 207,000,500 yuan to participate in the company. Lianshuo equipment is a manufacturer of LED automation equipment, including domestic first-line LED lighting companies such as Taiwan Kangshu, Changfang Lighting and Skyworth. On February 24, Zhongjing Electronics acquired Fangzhengda 100 shares for 21.27 million yuan, and officially cut into the field of LED lighting. Founder's estimated value reached 286 million yuan. On February 28, Crystal Optoelectronics acquired 20 shares of Taijia Electronics for 14.38 million yuan. In March, chip maker Microchip Technology Inc. (MCHP) acquired Supertex Inc., a manufacturer of high-voltage analog and mixed-signal chips, for $394 million in cash to strengthen its supply to the medical, LED lighting, industrial and telecommunications industries. On May 21, Weiwei Co., Ltd. announced that in order to expand the domestic market, Weiwei Co., Ltd. and all shareholders of Pinshang Lighting signed the “Equity Transfer Agreement†on May 19th to illuminate the products with 123 million. On May 24, on the last day of the three-month suspension of the suspension, Zhongjing Electronics disclosed the acquisition plan and planned to acquire the shares of Hunan Zhengda 100 by way of issuing shares and cash. On May 27, Lehman Optoelectronics announced that the company intends to invest RMB 35.939 million in cash to acquire 43.3 equity of Shenzhen Kangshuo Exhibition Electronics Co., Ltd., and to invest RMB 16.10 million within 10 working days after the completion of the above equity delivery. Kang Shuo Zhan increased its capital, accounting for 13.59 of the registered capital after the capital increase, of which 3,412,900 yuan entered the registered capital, and the premium part was 1,295.8 million yuan, which was included in the capital reserve. Upon completion of the capital increase, the company will hold a total of 51 shares of Kangshuo Exhibition and become its controlling shareholder. On June 19, Tongfang announced that it intends to subscribe for 1 billion new shares (with a par value of HK$0.1 each) issued by Zhen Mingli Holdings Co., Ltd. through its wholly-owned overseas subsidiary THTF Energy-Saving Holding Limited, and issue a comprehensive offer to Zhen Mingli shareholders. Acquisition. The subscription price is HK$900 million. The company will hold the equity of Zhenlili 51.6 through THTF ES and become its controlling shareholder. The industry will be awarded the title of LED lighting explosion year in 2014. The industry is developing rapidly. The leading LED companies are actively expanding. Whether it is vertical integration between the upper, middle and lower reaches to seize the market, or the horizontal integration between enterprises in the same field is rapidly expanding. Or the vertical breakout of the strong breakout, the ultimate goal of the company to initiate mergers and acquisitions is that the company hopes to bring the advantages of scale, channel, brand, production, technology, talents and other aspects to the enterprise through mergers and acquisitions, achieving the effect of 1 12 . Can LED companies achieve the expected results through mergers and acquisitions? Due to the different entrepreneurs, the two companies in the early stage have differences in management, culture, and values. Therefore, the industry believes that although the transactions generated by mergers and acquisitions can be immediate, however, the expected benefits will be in the later run-in. Clearly thinking and assessing risks The current LED industry is highly competitive, the market is chaotic and disorderly, and a large number of homogenized and low-end products robbed limited channel resources, which not only caused waste of resources, but also weakened the competitiveness of the entire industry. . As a well-established method of resource integration, mergers and acquisitions have become an industry consensus by acquiring mergers and acquisitions to seize the upcoming lighting market. From the many M&A cases in the LED industry in recent years, there are mainly the following characteristics: cross-border or mid-upstream enterprises use mergers and acquisitions to enter the lighting field, extend the industrial chain to achieve diversification strategies; small and medium-sized enterprises adopt horizontal mergers, complementary advantages, and utilization Integrate and strengthen its own strength, improve its core competitiveness; avoid the restrictions on patent property rights through mergers, partial acquisitions, etc., and gain market initiative. Industry consolidation will undoubtedly become an industry trend, and the situation that the stronger is stronger and the weaker is weaker will be fully revealed. No matter which form of integration, it is to better fight the LED lighting era. For a time, high-quality lighting enterprises have become the scent of the capital market, and enterprises with sustainable profitability and reaching a scale of 100 million yuan have become the target of public criticism. In contrast, the domestic LED industry, the number of enterprises that can meet the conditions is very small, which has led to a situation in which the LED industry merger and acquisition market is plentiful. Under the frenzy of LED lighting mergers and acquisitions, normal industrial mergers and acquisitions became a game of speculative and financial mergers and acquisitions. The emergence of this situation has also affected the normal trading order to a certain extent, pushing up the standard asset price. As mentioned earlier in this article, M&A does not necessarily achieve the effect of 1 12, and risks and opportunities coexist. First of all, financial risks, corporate mergers and acquisitions often require a large amount of funds, if the company is not properly funded, it will have an adverse impact on corporate finance; second, the assets are not real risk. If in the process of mergers and acquisitions, the information of the two parties is asymmetrical, there may be a serious overestimation, which will cause great economic losses to the acquirer; once again, integrate risks. After the completion of the merger and acquisition, the company may not have synergistic effects. It is difficult for the resources of the two parties to achieve mutual complementarity, and even the scale will be uneconomical, resulting in an increase in management costs, labor costs and operating costs. The entire enterprise will be dragged down into the enterprise. Mergers and acquisitions are risky and companies need to be cautious. In this LED industry knockout game of survival of the fittest, the role of group heating is far greater than that of single-player, which is the root of many companies looking for partners. From a policy perspective, the policy environment and market environment faced by LED industry mergers and acquisitions will become increasingly loose in the future. Recently, the State Council issued the "Opinions on Further Optimizing the Market Environment for Mergers and Reorganizations of Enterprises". According to the contents of the "Opinions", except for the listing of the backdoors and the issuance of shares to purchase assets, the CSRC will approve the merger, and other mergers and acquisitions will be cancelled. This is seen by the public as a signal of mergers and acquisitions, which will greatly reduce the cost of mergers and acquisitions. We can foresee that the massive wave of mergers and acquisitions in the LED industry is about to surge.