Chinese machine tool overseas mergers and acquisitions: how many years of success or failure

The peak period of overseas M&A in China's machine tool industry was concentrated in 2002-2006. In the past five years alone, there have been 10 cross-border mergers and acquisitions in the industry, including the acquisition of Ingersoll Production Systems, Ingersoll Crankshaft, Zimmermann, and Shanghai Mingjing Machine Tool Company. Warrenberg, Japan's Chibei Company, Qinchuan Machinery Development Co., Ltd. acquired United Industrial Corporation, Shenyang Machine Tool acquired German Heath Company, Beijing No. 1 Machine Tool Plant acquired Wudrich Coburg Machine Tool Plant Two companies and so on. In the past ten years, when the “Belt and Road” once again called for the “going out” of China’s manufacturing industry, what are the marks of these pioneers in the machine tool industry that have left China’s manufacturing industry for ten years? What other can be used as the navigation lights for the people who are going to sea?

North a merger in the past 10 years more than a dozen cases of overseas acquisitions, most people relish the machine tool industry is a machine tool acquisition of North Coburg, Germany. Although the official signing time was in October 2005, the acquisitions at the time were quiet. Until the 60th anniversary of the establishment of the factory in Beiyi, the details of the acquisition were widely disclosed.

Also announced at the same time as the specific acquisition process is the results achieved after the acquisition. From the second year of 2006, the new orders in the same year are equivalent to the sum of the two years of 2004 and 2005. In 2007, sales exceeded the 100 million euro mark. In 2008, sales revenue increased by 70% compared to 2007, twice as much as in 2005; profits doubled in 2007, five times that of the 2005 acquisition. Three years later, in 2009, sales revenue increased by three times, total profit increased by five times, contract orders were 10 times higher, and jobs increased by 40%. Also benefiting from the simultaneous acquisition of the North is the parent company itself. It is reported that the sales revenue of Beiyi in 2008 was 2.45 times before the merger in 2005; the profit of Beiyi in 2008 was 9 times before the merger in 2005.

The acquisition was evaluated by some insiders as “snake swallow” because Coburg’s heavy-duty, super-heavy gantry boring and milling machines and guide grinders account for the world’s number one product, claiming to be the “crown jewel in the machine tool industry”. It is a German old machine tool company founded in the 1930s. In contrast, the same age as the Republic of the North, from the 1980s as a student to learn from the teacher Coburg, and has been working with it for more than 20 years of cooperation. Although the acquisition negotiations experienced a lot of hardships, in the end, the North “takes down” Coburg and revived Coburg in a short time. The strong integration capability of Beiyi is self-evident, and the market demand for heavy-duty machine tools that China has soared in the past decade has also played an indispensable role.

According to industry insiders, the success of Beiyikebao is on the one hand that Coburg successfully used the Chinese market. On the other hand, Beiyi is also in a good position to transform and utilize Coburg technology. According to Beiyi, from 2006 to 2008, they refreshed the price of a single gold cutting machine in China from 52 million yuan to 87 million yuan. The price of a single machine tool was close to 100 million yuan, which caused a great shock in the Chinese machine tool industry at that time, and the industry was also encouraged. From the perspective of these three machine models, they are all major machine tools. However, before the entire machine tool industry, the industrial output value of the heavy-duty machine tool industry declined in 2010, and there are still no signs of improvement until today. Another of the heavy-duty machine tool industry, Wuhan Heavy Machine Tool Group Corporation was integrated into the China Ordnance Industry Group in 2011. As a manufacturer of heavy-duty machine tools, Beiyi is hard to be independent in its business performance. Therefore, at this point in the current node, if only the financial figures are used to evaluate the Beiyi acquisition, I am afraid that there is a bias. “It has been profitable”, which is still a tribute to the overseas acquisition of the machine tool industry and even the Chinese manufacturing industry.

Shenyang Machine Tool M&A Case In October 2004, Shenyang Machine Tool acquired the German company Heath. Although Heath was bankrupt at the time, due to its strong technical advantage, it still attracted 8 bidders at home and abroad, including 4 Chinese companies.

After one year of mergers and acquisitions, progress has been made very quickly. In 2005, Germany Heath Co., Ltd. received 380 million yuan in product orders and achieved sales income of 200 million yuan. In the same year, Heath's city of Arthursleben, Saxony Anhalt, awarded the “City Economy Award” to Shenyang Machine Tool, the first time the city awarded the economic prize to a foreign company. The German Industry Association also called the acquisition "a successful cross-border M&A case." At the beginning of his succession, he was sent to the German company Heath, mainly the president of Shenyang Machine Tool, Yu Hongchen, as the general manager of the Chinese side. In the first few years, there have been some changes in management and distribution, and initial results have been achieved. Through subsequent disclosures, the national talents were surprised to find that a German company actually had the problem of “internal mess and poor working environment”. At the same time, Shenyang Machine Tool also benefited from this acquisition. At the China CNC Machine Tool Show held in Shanghai in 2006, the GTM320140 gantry mobile turning and milling center developed by Heath Technology was well received by the industry. There was no more detail in the replacement of the German management team in 2008, but the financial situation of Heath in 2008-2010 was officially disclosed in the announcement of Shenyang Machine Tool. In recent years, the sales revenue of Shenyang Machine Tool Germany Heath Company is between 400 million yuan and the profit is more than 6 million yuan. By 2013, Heath limited liability company's operating income was 390 million yuan, but the net profit was -765.537 million yuan.

Shenyang Machine Tool has also made some efforts to this end, including the related transactions with Heath in 2012, the product quality inspection and market research, machine tool repair improvement and foreign exhibition business to Heath, but the economic environment is difficult to Fundamentally inciting this situation. At this time, the resumption of use of the ASCA brand began to surface. It is understood that ASCA is the traditional brand Ashersleben under Heath. It is understood that since 2012, with the support of the China Development Bank, Shenyang Machine Tool Group has invested a total of 250 million euros to launch an international product development project. The launch of ASCAMillT-2560w high-speed moving beam gantry machining center was the embodiment of a new international business model of “German design, China manufacturing, global marketing”. In 2015, the ASCA brand was further enriched, and five series of products such as ASCAMILL-T have been developed.

Qinchuan Machine Tool M&A In November 2003, Qinchuan Machinery Development Co., Ltd. and UAI signed a share purchase agreement to acquire 60% of its shares for US$1.95 million and become the controlling shareholder of UAI. Qinchuan and UAI's honeymoon period started very early. In 2005, with the assistance of Qin Chuan, UAI and Chunlan made a one-time transaction of 1 million US dollars to obtain the “first order” in the Chinese market. In the same year, UAI also achieved good results: sales revenue of 4.6 million US dollars, an increase of 176%, and achieved a profit of 200,000 US dollars. Compared with the net profit of tens of thousands of dollars in 2002, there has been great progress. “In 3 years, Qinchuan development can recover the cost”, Long Xingyuan, chairman of Qinchuan Machine Tool Group, said at the end of 2003. However, in the following years, Qin Chuan and UAI's founder Kekmel family contradicted. In 2007, Kekemel officially left, UAI hired a professional manager in the United States as president. In 2010, UAI completed a main business income of 29.74 million yuan and a net profit of -500,000 yuan. In 2011, UAI was just beginning to turn a profit.

Relying on UAI, the "bridgehead", Qinchuan has gained a lot. In 2006, Qinchuan not only participated in the Chicago Machine Tool Show with UAI, but also obtained the first user of the United States, the supplier of Ford Motor, and also a long-term cooperation customer of UAI. It purchased the gear grinding machine of Qinchuan. YK7236A. Since then, the YK7332 gear grinding machine and high-precision cylindrical grinding machine have also been favored by other parts companies such as American automakers, truck manufacturers and petroleum machinery manufacturers. Qinchuan Development began to enter the US high-end CNC machine tool import market led by German and Japanese companies. At the same time, Qinchuan has accumulated experience in the automotive industry since the beginning of the supply of Ford Motor Company, and began to sell to domestic automakers, including Shanghai Automotive Group and BYD Auto. Qinchuan also used the in-depth cooperation with UAI in technology, and developed two prototypes in collaboration with Qinchuan Development, Hanjiang Tools and UAI technicians in the national project of “Precision CNC broach tooth grinding machine”.

However, Qinchuan's internationalization is far more than UAI. In 2007, Qinchuan Development invested USD 2.82 million in the Detroit area to establish its wholly-owned subsidiary, Qinchuan American Industrial Company (QCA), responsible for the development of Qinchuan's domestic high-end CNC machine tools for North America, and gradually established Qin. Sichuan Group's assembly base, R&D base and pre-sales and after-sales service base in North America. In August 2011, Qinchuan invested another US$4 million in the city of Ipslan, Michigan, USA, and established the Qinchuan North American R&D Center based on QCA, a wholly-owned subsidiary of the company. The other line is the American Broaching Systems Company (ABM). When Qinchuan acquired UAI in 2004, it also included three subsidiaries, namely American La Cutting Machine Tool Company, North Adams Manufacturing Company and Aber Machine Tool Company. ABM is one of them. In 2005, ABM began to adjust its China policy and directly and systematically entered the Chinese market. At the same time, Qinchuan also carried out cooperation with it. The major special product CNC broach grinding machine project undertaken by the group is the result of Sino-US cooperation. In 2010, ABM also began to sell the gear cutters of the Group. In 2012, it established a ball screw service center in North America.

These three mergers and acquisitions are typical representatives of the machine tool industry, although it is difficult to say that they have achieved profitability from the current financial data. However, the Chinese machine tool industry has its own gains in the journey towards internationalization. Transnational mergers and acquisitions, as a high-risk business activity, test the wisdom of strategic decision makers. But even the best entrepreneurs in the world, no one can accurately predict the future. All business activities are based on the current environment, the state of the company itself, and so on. Caterpillar, the world's top 500 and construction machinery giant, stated that its acquisition must meet three criteria: the acquired company needs to be close to Caterpillar's core business; the acquired company is in good condition and can capture huge Market share; returns must be immediate, Caterpillar's minimum expectation of capital recovery is usually 17% before tax, and investment behavior that cannot be promised to achieve this rate of return will be directly abandoned by Caterpillar. Compared with those international 100-year-old companies, the ten-year overseas M&A process of young Chinese machine tool companies is only the beginning.

Full Power Emergency Battery Pack

The Full power emergency pack is ideal for LED tubes 3-40W Full power emergency output wattage for LED emergency lighting 60-180mins. Automatic lighting up when main power failures. Suitable for LED fitting with external led driver and internal driver. Widely using for parking lot, office, building, warehouse, school, hospital, workshop etc.

Emergency Lighting Battery Pack,Emergency Battery Pack For Led Lights,Emergency Power Packs,Bodine Battery Pack,led battery backup ballast

Foshan Nai An Lighting Electric Co.,ltd , https://www.emballast.com