The Historical Differences between Gree and Beauty

1. Different M&A paths of the three major home appliance giants in industrial adjustment.

20 15, the home appliance industry is cold. According to the information released by the Ministry of Industry and Information Technology, the main business income of home appliance industry in 201512 years was10.4 trillion yuan, with a cumulative year-on-year decrease of 0.4%. According to the calculation data of Zhongyikang, in 20 15, the retail sales of air-conditioning market decreased by 5% year-on-year, and refrigerators decreased by 2.2%. Among the three major white goods, only the washing machine achieved a small increase, and the retail sales increased by about 1.8%.

The revenues of Gree, Midea and Haier, the three major companies of China White Power, all declined. According to the annual reports of 20 15 three companies:

Haier's total revenue in 20 15 was 89.748 billion yuan, down 29.04% from the same period last year. The non-net profit attributable to shareholders of listed companies was 3.675 billion yuan, down 65.438+05.05438+0% year-on-year.

Gree's total revenue in 20 15 was 97.745 billion yuan, down 7.41%compared with the same period of last year; The non-net profit attributable to shareholders of listed companies was 65,438+0,236,5438+0.4 billion yuan, a year-on-year decrease of 65,438+02.95%.

In 20 15 years, Midea's total revenue decreased by1384.410 million yuan, down by 2.28% compared with the same period of last year, while the non-net profit attributable to shareholders of listed companies increased by 15. 14%, reaching/kloc-.

In the case that the air-conditioning market was greatly impacted, Gree was most significantly affected, with its total revenue falling by nearly 30%, but its net interest rate rose by 2.37% to 12.55%, which was significantly ahead of the other two companies.

The market generally believes that the home appliance industry will face a new round of industrial adjustment, but there is not much room for domestic home appliance market integration, so the future goal will mainly focus on international integration or industrial transformation and upgrading. In 20 16, Haier, Midea and Gree successively issued merger plans, and their future development strategies behind the merger targets were also different.

1. 1 Haier buys GE home appliances.

Trading scheme

Planned time: 2016116;

Target company: General Electric Business (GEA);

Target price: US$ 5.4 billion (equivalent to about RMB 35.444 billion);

Payment method: all cash payment;

Sources of funds: self-raised funds of listed companies and funds obtained by applying for M&A loans and other financing methods. The amount of M&A loan used in this transaction shall not exceed 60% of the transaction consideration;

The net profit of listed companies in recent three years: 2013417,4017, 400 yuan, 201453,746,438+million yuan, 201543,760.

The net profit of the target in recent three years: 2015-5.795 billion USD, 2014153.45 million USD and 2014/33.55 million USD;

Performance commitment: None;

Transaction process: consolidated report has been realized.

1.2 Midea continuously acquired Toshiba Household Appliances, KUKA Group and Clivet of Italy.

In the first half of the year, Midea Group announced cross-border mergers and acquisitions, in addition to the most concerned acquisition of KUKA in Germany, as well as the acquisition of Toshiba household appliances in Japan and Clivet, an Italian central air-conditioning company.

Midea Group acquires KUKA, Germany

Draft release date: 2065438+May 26th, 2006;

Target company: shares of Kuka Group held by other shareholders who intend to accept the offer except Mecca (the minimum intended shareholding ratio is more than 30%);

Transaction method: 1 15 Euro/share is a comprehensive tender offer;

Target price: If all the other shareholders of KUKA Group except Mecca accept the offer, the total purchase price will be about 29.2 billion yuan;

Payment method: all cash payment;

Sources of funds: syndicated loans and self-owned funds;

The net profit of listed companies in recent three years: 20 15 1270673 million yuan, 20 14 150222 million yuan, 20135317.46 million yuan;

The net profit of the target company in recent three years: 2065438+1-2 1 ten thousand euros in March 2006, 2065438+86.8 million euros in 2005, and 68 1 four years;

Performance commitment: None;

Transaction process: CFIUS and DDTC of the United States still need to be reviewed, and the above government approval must be completed by March 3 1 2065438 at the latest.

1.3 Gree acquired Zhuhai Yinlong.

Trading scheme

Target: Zhuhai Yinlong 100% equity;

Issuance of shares to purchase assets: 834.939 million shares were issued at the price of 654.38+05.57 yuan per share, with a total price of 65.438+03 billion yuan; The proportion of newly-increased shares in the total share capital after issuance is12.19%;

The historical net profit of the target: the net profit deducted from the mother in 20 14 was-265 million yuan, which turned losses into profits in 20 15, and the net profit deducted from the mother in 20 16 was 433 million yuan, which was 322 million yuan;

Performance commitment: the actual audited net profit from 20 16 to 20 18 shall be no less than 720 million yuan,1000 million yuan and1400 million yuan respectively;

Raising matching funds: 65,438+05.57 yuan/share, with no more than 622,632,900 shares issued at the locked price and no more than 9,694 million yuan raised matching funds;

Use of raised funds: it is intended to be used for Zhuhai Yinlong construction investment project;

Subscribers: Gree Group, Yintong Investment Group, Zhuhai Jin Tuo, Zhuhai Rongteng, CITIC Securities, Sun Guohua, Cai Zhaohong Road and Gree Electric Employee Stock Ownership Plan.

Transaction process: the proposal of the shareholders' meeting on raising matching financing failed to pass, and the plan is currently being revised.

2. The benefits brought by different M&A options and the driving forces behind them.

2. 1 The merger of Haier and Gree has achieved remarkable results.

Haier and Midea's overseas mergers and acquisitions have brought them considerable comprehensive achievements:

Haier's acquisition of GE home appliances was completed on June 6, 20 16. By the end of September, GE household appliances had contributed 654.38+0.435 billion yuan in revenue and 365.438+0.7 billion yuan in net profit.

Midea's acquisition of 80. 1% equity of Toshiba Household Appliances was completed on June 30th, 20 16. In the third quarter, due to the merger of Toshiba household appliances, the main business income increased by 3.873 billion yuan, and the net profit returned to the mother increased by197.02 million yuan.

Midea's merger with Haier has achieved remarkable results, but Gree's merger has encountered great resistance and obstacles.

2.2 Gree Electric merger blocked, the company's shareholding structure has become the biggest incentive.

2016 101October 30th, Gree Electric issued an announcement to announce the resolution results of the extraordinary shareholders' meeting held on October 28th, 65438. The results show that all the parts of Gree Electric's plan to acquire Zhuhai Yinlong about raising matching financing were rejected. The biggest difference between the two parties is the dilution of equity.

Xiao Wang @ M&A Wang summarized Gree Electric's three demands for the acquisition of Zhuhai Yinlong in the article "Gree Billion Financing Rejected, Miss Dong VS Minority Shareholders". In addition to the needs of transformation and industrial upgrading, the remaining two needs are closely related to Gree Electric's shareholding structure:

Gree's share rights are scattered, facing the invasion pressure of "barbarians" and the need to consolidate control rights.

The shareholding ratio of Gree Electric's controlling shareholder is only 18.22%. In 2065,438+05, China Life Insurance, Qianhai Life Insurance and Anbang Insurance all bought in large quantities. At one time, the shareholding ratio of related companies, the main competitor of Midea Group, approached Dong Mingzhu.

Gree Electric has the intention of MBO, and the management hopes to improve its control over the company through trading.

There are many differences between the management of Gree Electric and Gree Group, the state-owned controlling shareholder of the company, during the development of the company. The management of Gree Electric, headed by Dong Mingzhu, has been hoping to improve the management's control over the company.

On the other hand, Midea Group and Qingdao Haier do not have these two problems. As of the third quarter of 20 16, the shareholding ratios of the top ten shareholders of the above-mentioned companies are shown in the following table:

The shareholding of the top ten shareholders in Gree Electric 20 16 quarterly report;

The shareholding of the top ten shareholders in Qingdao Haier 20 16 quarterly report;

The shareholding of the top ten shareholders of Midea Group in the third quarter of 20 16;

Gree Electric, Midea Group and Qingdao Haier were founded at the same time, with similar development processes. At first, they were all state-owned assets. But in the end, it formed a different ownership structure, which led to such a different M&A road. What happened in the middle?

3. Briefly describe the history of equity change: from Gree's dilemma to Midea's and Haier's success "MBO"

3. 1 gree dilemma: the internal and external troubles implied by the company's shareholding structure.

Gree Group was established in 1985, formerly known as Zhuhai Special Economic Development Corporation. At present, the well-known Gree generally refers to Gree Electric, which was founded in 199 1 and formerly known as Zhuhai Lihai Air Conditioning Factory.

Gree Electric has rapidly developed into a leading domestic air-conditioning sales enterprise, and listed on the Shenzhen Stock Exchange on 1996. However, the whole development period has been accompanied by the game between the company's management and the company's state-owned controlling shareholders. Two of them gradually made the contradiction between the two sides transparent.

First, after Gree Electric successfully established its brand, Gree Group authorized Gree brand to its other subsidiaries to produce homogeneous products, competing with Gree Electric for market share, which caused dissatisfaction in Gree Electric. In 200 1 year, Zhu Jianghong, then general manager, proposed that Gree Electric acquire a similar subsidiary of Gree Group, but it was rejected. It was not until 2004 that the two sides reached a deal.

Second, Gree Group tried to sell Gree Electric to Carrier, an international air-conditioning giant and a Fortune 500 company. At that time, it was reported by the media that the management of Gree Electric only knew that Gree Electric was going to be sold when Carrier was ready to go to Gree Electric. Zhu Jianghong, then chairman of Gree Electric, said in an interview that "Gree Electric is very worried about transferring enterprises to foreign companies".

But 2005-2006 coincided with the restructuring of state-owned enterprises. According to the stipulations in the opinion of the Securities and Futures Commission on the reform of non-tradable shares, Gree Group is not allowed to transfer Gree Electric shares within one year after the reorganization, and the transfer ratio is limited to 5%- 10% after one year, which leads to the unsuccessful acquisition. However, under the pressure of controlling shareholders, Gree Electric failed to complete MBO through the reform of state-owned enterprises like Midea and Haier, leaving the foundation that state-owned assets still control the company's shareholding structure.

At the same time, Gree Group began to gradually reduce its holdings and cash out one year after the split share structure. At present, as the controlling shareholder, it only holds 65,438+08.22% of the shares of listed companies, leaving the company with hidden dangers of scattered shares.

3.2 Midea and Haier: MBO is difficult to solve the problem of enterprise property rights

Midea Group: the first listed company with successful MBO in China.

Midea Group's predecessor was the plastic bottle cap factory founded by founder He Xiangjian and others. 1980 began to produce vermicelli. Since then, it has successively registered the "Midea" trademark, entered the air-conditioning industry, and listed on Shenzhen Stock Exchange 1993.

1997, Midea reformed the business division system, introduced modern enterprise management system and established a complete enterprise management system. However, founder He Xiangjian has been worried that the company's property rights may have an impact on the company's future. Therefore, in 2000, management and trade unions in the United States were promoted to set up Meto Investment Company.

In May, 2000, Meituo Investment agreed to accept the shares of Midea as a legal person held by a company affiliated to the local town government at a price of 2.95 yuan per share, and in 10, it agreed to accept the shares again at a price of 3 yuan per share. Two acquisitions * * * have acquired 22. 19% of the legal person shares of Midea, costing about 32 10/00000 yuan. In the end, Meituo Investment became the largest shareholder of the company, Midea's management completed Midea's group MBO, Midea became the first listed company in China to complete MBO, and also formed the "initial version" of Midea's current shareholding structure.

Qingdao Haier: Equity Incentive and the Road of "MBO" in Several Years

Qingdao Haier was founded in 1984, formerly known as Qingdao Refrigerator General Factory. When Zhang Ruimin took over as the director, the factory had lost1470,000 yuan and was on the verge of bankruptcy. After Zhang Ruimin took over, he carried out strict quality control, leaving a beautiful talk of ordering employees to "smash refrigerators" because the quality of refrigerators was not up to standard.

Since then, Haier has established a good brand image with excellent quality control and developed into a leading refrigerator enterprise. 1997 the total revenue exceeded10 billion, and at the same time, it began to diversify, and it also began the road of "MBO" for several years.

From 2000 to 2004, Haier has been committed to improving the control of the company's management, and the so-called "MBO" has also triggered a famous debate about the loss of state-owned assets, which was later summarized as "the dispute between Lang and Gu". However, Haier has kept a low profile and silence in the debate, and said that the company's attribute is "collective enterprise" rather than "state-owned enterprise".

However, it is a series of equity incentives and "MBO" measures that make the management's control over Haier improve to the present situation.

4. There is still a long way for China enterprises to go from being almost acquired by the world's top 500 companies to being among the world's top 500 companies.

4. 1 In the development history of Midea and Haier, M&A plays an extremely important role.

From 65438 to 0998, Midea entered the field of air-conditioning compressors through the acquisition of Toshiba Wan Jiale, and in 2004 -2005, it successively acquired modern electrical appliances, Jinke electrical appliances and other home appliance enterprises. At the same time, through the acquisition of Maytag International Investment, it indirectly controls 50.5% equity of Rongshida, another home appliance giant, and expands its business to refrigerators and other fields. In 2008, the whole acquisition of Rongshida was completed, and in the same year, another leading domestic refrigerator enterprise, Valin Group, and a leading washing machine enterprise, Little Swan, were acquired.

Haier Group put forward the theory of "activating huckfish" from the beginning, and as a part of corporate culture, it has successively acquired dozens of companies such as Hongxing Electric Appliances and Caiyang Household Appliances in China. At the same time, it began to enter overseas markets very early. Since 2002, we have cooperated with Sanyo Electric of Japan. Since then, it has acquired Sanyo's home appliance business in Japan, Southeast Asia and other places, and gradually integrated and digested it. 20 12 also acquired Fisher &；; Peckel.

4.2 There are few "M&A figures" in the development history of Gree Electric, and the different capital structure leads to a completely different situation.

In contrast, the key word "M&A" rarely appears in the history of Gree Electric. The most famous M&A was almost sold to American Carrier by Gree Group. The acquisition of Zhuhai Yinlong for 654.38+03 billion yuan is the largest acquisition ever made by Gree.

Xiao Wang @ M&A Wang consulted the third quarterly report of 20 16 and found that the book monetary fund of Midea Group was 65.438+08.584 billion yuan, that of Qingdao Haier was 65.438+09.867 billion yuan, and that of Gree Electric was as high as 97.234 billion yuan. However, in the performance of M&A, the first two are borrowing to acquire international industry leaders and expand and upgrade the industrial chain; Gree, on the other hand, is an enterprise that issues shares to acquire domestic new energy vehicles, seeking transformation, and at the same time taking into account the "external worries and internal troubles" in the company's control.

This situation is closely related to the personal management style of entrepreneurs and the corporate culture formed in the development, but the influence of corporate capital structure can not be ignored. Midea and Haier faced many disputes in the difficult "MBO" process, but they did solve the hidden dangers brought by the property rights of enterprises. However, the game between Gree Electric's management and controlling shareholders will inevitably restrict the development of the company, which will eventually lead to a completely different situation between Gree Electric and the other two companies.

However, even in the constant game with the controlling shareholder, Gree Electric's performance and profitability are undeniably excellent, facing many "external worries and internal troubles".

Gree Electric was almost bought by the world's top 500, and today it has become one of the top 500. Beating around the bush, I almost bought Gree's American Carrier, and its Latin American business was taken over by Gree Electric's most favorable competitor Midea Group.