German local time on May 29, German auto parts company Grammer issued a statement saying that China's Ningbo Jifeng Auto Parts Co., Ltd. is in in-depth negotiations with it, and may use its German subsidiary Jiye Auto Parts to Grammer wholly-owned acquisition.
Jifeng's offer for Grammer is 60 euros per share, which is 19.4% higher than the closing price on May 28. Interest per share is 1.25 euros, which totals 61.25 euros per share. Grammer's valuation is 750 million euros. In the first statement, Grammer said: "At this time we are not sure whether the negotiations will be successful and whether the acquisition will be completed." He said "the acquisition will be evaluated from the perspective of maximizing the company's interests."
But in a more detailed statement that followed, Grammer emphasized "to maintain Grammer's independence", "stabilize equity structure" and "guarante Grammer's growth strategy."
Prior to this, Wang Yiping, chairman of Jifeng Auto Parts Co., Ltd. said that Jifeng was establishing a joint venture with Grammer in China, discussing other potential cooperation projects, and may purchase further equity.
It is reported that Jifeng currently holds 25.51% of Grammer's shares. The current transaction may increase Jifeng's shares to 50%. To achieve absolute control, 75% of the shares are required. Jifeng has no intention to require absolute control.
However, Harald Eggeling, an analyst at Oddo, one of Europe's largest financial groups, said Jifeng's bid may not exceed the Hastors family, the second largest shareholder, who may bid 70 euros per share.
In 2017, Grammer sold part of its equity to Jifeng to resist the hostile takeover of the Bosnian billionaire Hastor family, when the Hastor family and Volkswagen were involved in a supply chain dispute. Hastor was then Grammer's largest shareholder, controlling 19% of the shares.
At the 2017 shareholders' meeting, Hastors intends to promote the replacement of most Grammer leaders, including CEO Hartmut Mueller. After Jifeng Motors became the White Horse Knight, the move ultimately failed, and Jifeng supported Grammer's management. Although Grammer's internal conflict last year resulted in a "significant drop in orders", Mueller said in March this year that Grammer could largely make up for the loss of past business.
Behind this acquisition can also see the shadow of automakers. Two years ago, Hastors Holdings, the Prevent Group, had intended to acquire Grammer, citing an order dispute with Volkswagen. Last month, Volkswagen cancelled all contract orders with Prevent.
Grammer is a world-renowned supplier of seat faucets and passenger headrest armrests for engineering vehicles. In 2017, the company achieved revenue of 1.79 billion euros (+ 5.4%), of which the passenger car business and commercial vehicles accounted for about 7: 3.
In addition, Greymer has been interested in expanding its business in the North American market and announced last week that it plans to acquire Toledo Molding & Die Inc. Once Grammer acquires Toledo's TMD for $ 271 million, Grammer's sales in North America will increase by $ 300 million, and it will acquire 10 plants in the United States, 1 plant in Mexico, and 1,600 employees. Currently, Grammer has revenues of approximately $ 250 million in North America, five plants in the United States, and two plants in Mexico.
In an investor speech, Grammer said that the acquisition of TMD will enable its business to be more geographically distributed. Currently 68% of its revenue comes from Europe, the Middle East and Africa, 18% from the United States, and 16% from Asia Pacific. The successful integration of Grammer and Jifeng will have a significant synergy effect on the company's existing business.
In terms of product structure, Grammer is an international commercial vehicle standard maker, while leading in passenger car control technology, Jifeng's product category will be further extended; in terms of customer structure, Grammer will bring rich commercial vehicle customers to Jifeng In terms of geographical distribution, Grammer's business is concentrated in Europe and the United States, and Jifeng's layout in China is conducive to market development for both parties.
In 2018, Ningbo Jifeng's first quarter revenue was 509 million yuan, an increase of 26.18% year-on-year. The rapid growth of the company's revenue has benefited from two aspects: one is that domestic orders for new models have been harvested, and the market share has continued to increase; the other is that overseas customers have been expanded, and German Jifeng and Czech Jifeng have won Volkswagen, Jaguar Land Rover, Orders from companies such as Porsche, BMW and Daimler have seen rapid growth in overseas revenue.
In 2016, Midea Group acquired robot manufacturer Kuka. This spring, Geely became Daimler Benz's largest shareholder again, raising German leaders' concerns about Chinese investors acquiring European assets. Jifeng's acquisition may Once again, opposition from German public opinion was triggered, but in terms of the current situation, Ji Feng's odds are great.