Fufeng Dongfeng reorganizes Tencent
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After five years of searching and negotiations, Fuqi Group has finally successfully married a central-level auto group.
Last week, Dongfeng Motor and the Fujian Provincial Government signed a strategic cooperation framework agreement in Fuzhou. At the beginning, Dongfeng Motor will receive a 45% stake in Fuqi Group, and will join the Southeast (Fujian) Automobile Industry Co., Ltd. (hereinafter referred to as “Southeast Motorâ€); After the phased goals, Dongfeng Motor will increase its stake by more than 60%. Both parties plan to sign a formal agreement by the end of September.
The restructuring was the second large-scale reorganization after the introduction of China's "Auto Industry Adjustment and Revitalization Plan" in 2009. According to ministries and commissions such as the Ministry of Industry and Information Technology, the auto industry will form two or three large companies with a scale of more than 2 million vehicles through mergers and reorganizations, and train 4 to 5 automotive enterprise groups with a scale of more than 1 million vehicles.
However, combined with the recent mergers and acquisitions of Ford-Volvo, Daimler-Chrysler, FAW-Tian Automobile, etc., the reorganization is not easy.
“The reorganization of auto companies can be roughly divided into two categories: one is the integration of products and platforms, the other is the integration of resources, and the restructuring of Dongfeng and Fuqi should belong to the latter. We have seen global and There is not much success in the restructuring of the domestic auto industry,†senior industry veterans told reporters.
In November 2009, Changan acquired Changhe and Hafei, and started the process of collecting and distributing small groups and small companies in the four major automobile groups. However, as of now, Chang'an has successfully integrated Changhe and Hafei. Dongfeng Automobile Group restructuring Fuzhou, the future will be smooth or thorny?
Reconstructive surgery
"From the negotiations of Dongfeng Renault and some joint venture projects, we can see that with the change of Dongfeng strength, the decision-making level has increasingly demonstrated a strong interest appeal," said a person who has long been concerned about Dongfeng Motor. Restructuring the blessings may prove another example of this.
Unlike Changan Automobile and SAIC Group’s overall acquisition of Changhe, Hafei and Nanqi, Dongfeng Motor has designed a “two-step†restructuring model after initial equity participation. On the surface, Fujian SASAC, which holds the remaining 55% equity, is the major shareholder of Fuqi Group, but through a series of operations, Dongfeng Motor has become the actual controller of Southeast Automotive, the most important subsidiary of Fuzhou Automobile Group, and has not been undermined by minority shareholders. Status constraints.
According to the strategic cooperation framework agreement signed between Dongfeng Motor and the Fujian Provincial Government, Dongfeng Motor has acquired 45% equity interest in Fuzhou Automobile Group held by the Fujian Provincial State-owned Assets Supervision and Administration Commission in a capital increase manner. At the same time, Dongfeng Motor and Fuqi Group formed an investment company, and the investment company holds 50% equity of Southeast Auto. Dongfeng Motor will invest in part of the shares or capital increase of South East Automobile held by Fuzhou Automotive Group, accounting for 2-3% of the investment company, and Fuqi Group will account for 1/3 of the shares. Through this series of steps, Dongfeng Motor has become the actual controller of Southeast Motor.
Southeast Automotive is the largest subsidiary of Fuqi Group and is a three-way joint venture between Fuqi Group, Taiwan “China†and Mitsubishi Motors. It also manufactures and sells passenger vehicles of the Southeast and Mitsubishi brands. In 2012, the sales volume of Southeast Automotive was 107,000, and the operating income was 7.261 billion yuan, accounting for approximately 70% of the total operating revenue of Fuqi Group, with net profit and total comprehensive income of 37.295 million yuan. At the same time, the sales volume of the two new vehicle companies, the New Longma Microcar and the Fujian Mercedes-Benz, are 2200 units and 7700 units, respectively, both at a loss.
Dongfeng Motor and the Fujian Provincial Government agreed that when the sales volume of South East Automobile (including vehicle and engine) will be increased to 300,000, the Fujian Provincial State-owned Assets Supervision and Administration Commission will further transfer the shares, and Dongfeng Motor will hold more than 60% of its shares and become a controlling shareholder. The integration of Jinlong Auto (600686.SH) and Fujian Mercedes-Benz will begin.
In 2012, Jinlong Motor sold 78,000 vehicles and was one of the leading companies in the field of passenger cars. Fujian Benz is a joint venture between Fuqi Group and Daimler Group, currently only producing Mercedes-Benz brand high-end commercial vehicles. After the reorganization is completed, Dongfeng Motor and the Fujian Provincial Government will promote the introduction of Mercedes-Benz branded basic passenger cars, SUVs and MPVs. If this goal is met, Dongfeng Motor will add a German luxury car joint venture outside Infiniti to improve its profit structure that relies too much on Japanese joint ventures. In addition, Taiwan’s “Zhonghua†and Mitsubishi Motors each hold 25% of Southeast Motor’s shares, which may also add new opportunities for cooperation to Dongfeng Motor.
In 2012, Dongfeng Motor sold 3.087 million vehicles, which was affected by the Japanese car incident. Dongfeng Group (00489.HK) recorded a sales revenue of 124.036 billion yuan in 2012, a year-on-year decrease of 5.6%; net profit was 9.092 billion yuan, a year-on-year decrease of 13.25%.
Reorganization difficulties
Until the signing ceremony was held, Dongfeng Motor always deliberately kept a low profile. “We always emphasize the relationship with Fuqi is a 'strategic alliance' and not who reorganizes it,†Liu Weidong, deputy general manager of Dongfeng Motor, told reporters.
A senior person from Dongfeng Motor Company admits that the reason for abandoning the term “reorganization†was to avoid causing resistance to employees of Fuqi Group. The reporter was informed that Dongfeng Motor has promised the Fujian Provincial Government to maintain the production and operation and personnel stability of the Fuqi Group. The reorganized Fuqi Group has established a new session of the Board of Directors. The term of each session of the Board of Directors is 4 years. The Chairman of the Board is recommended by Fuqi Group and the General Manager is recommended by Dongfeng Motor.
The complicated equity relationship and the balance of shareholders' interests are another issues that need to be faced in the reorganization process. Taiwan Yulon Group has a close relationship with Dongfeng Motor. The industry generally believes that the resistance from “China†will be reduced in the reorganization process. Liu Weidong also said: "Southeast Motor's shareholders are 'Chinese' cars, Dongfeng's partners also have Yulon Motors, which is the two sides can communicate well."
Regarding part of Mitsubishi Motors, Dongfeng Motors insiders said that if the negotiation fails to reach a consensus, Mitsubishi Motors will not rule out acquiring 25% of Southeast Motor’s shares to ensure the smooth progress of the reorganization. In addition, the interests of Daimler Group and the major shareholder of Golden Dragon Motors Haiyi Group also require Dongfeng Motor to balance one by one.
In order to quickly help Fuqi Group to reverse its difficulties, Dongfeng Motor plans to implement a "full value chain reorganization" plan. The specific contents include the mobilization of resources including passenger cars, commercial vehicles, powertrains, and automotive finance, coordinating “Zhonghua†Automobiles, Mitsubishi Motors’ formulation of new product plans, and implementation of management outputs to improve procurement and sales systems. In addition, Dongfeng Motor also plans to build a new engine plant in Fujian Province, which will also be supplied by Dongfeng Liuzhou.
“Acquired by Dongfeng Automobile is the best result of Fuqi.†The people close to the top of the Fuqi Group stated that “'China’ and Mitsubishi are not enough to support the development of Southeast Automotive. The Daimler project will take a long time to be profitable. Funding and technology input can at least help Fuqi to grow bigger and deeper in Fujian Province."