House seemingly endless rain. When he stole about 500,000 euros of jewellery from Philippe Varan’s home at the president of the French Peugeot Citroën Group (PSA), his car business was also plunged into a greater financial crisis, and external signings had become the most direct and effective solution to PSA’s difficulties. s method.
At the same time, rumors about the Dongfeng Group's acquisition of PSA have begun to develop. There have even been media reports that Dongfeng Group intends to acquire 30% of PSA at a price of RMB 10 billion. In this regard, Dongfeng Group executives, who have always been silent on the issue, confirmed in an interview with the Economic Observer reporter on October 8 that Dongfeng has indeed launched an investigation on the PSA structure. “At present, the assets of PSA businesses (including vehicle manufacturing, parts and components, and financial companies) have not yet been fully understood. In particular, financial status and operation management models have not been fully grasped, and thus no acquisitions have yet been formed. The draft has a period of time before the formal launch of the acquisition, said Lu Feng, Dongfeng Group secretary secretary.
According to its disclosure, because it is still in the stage of investigating the structure of PSA, whether Dongfeng has acquired PSA or not, and what kind of plan it has cooperated with PSA has not yet reached its conclusion and draft, let alone the specific share ratio of the acquisition and the amount of investment. As a central state-owned enterprise, even if it is a draft, we need to go through the SASAC, the Ministry of Commerce, the National Development and Reform Commission and other ministries and committees for approval."
There is no doubt that Dongfeng Group has already initiated its interest in the acquisition of PSA. However, for this cross-border mergers and acquisitions, Dongfeng still behaved very cautiously. After all, SAIC had previously failed to merge with Ssangyong. Last year, Shuang Pang (Pang Yang, chairman of Zhejiang Youth Auto, and Pang Qinghua, chairman of the huge automobile trade) bid for Saab. It is also a "basket fetching water."
Therefore, whether or not to submit a proposal to the national competent authority in the future and formally launch this cross-border M&A will be decided by Dongfeng based on the results of the investigation of the PSA structure. Clearly understanding the bottom line of the PSA and suggesting improvements in PSA management and management will also be the main content of Dongfeng’s submission to the competent authorities in the future, and will also be an important reference for deciding whether or not the competent authorities can release.
"Architectural Survey" Pathfinder
On May 28th, after being rainy in Wuhan, one of China's “four stoves,†one of the four major stoves in China, Pei Pei’s family leader, Thierry Peugeot, visited PSA with PSA’s Executive Vice President and CEO of Asian Operations Olivier. , and held talks with Dongfeng Motor Chairman Xu Ping, General Manager Zhu Fushou, Deputy General Manager Liu Weidong and Assistant General Manager Cai Yu.
Although not controlling, the Peugeot family has always been the actual controller of the PSA, just like the American Ford family. Currently, the Peugeot family holds 25% of the PSA Group's common stock and 38% of the voting rights.
As the actual controller of the PSA, Thierry Peugeot had very few records in China before. According to public reports, in 2013, he had made an unprecedented trip to China three times, and there were two destinations for Dongfeng Group headquarters in Wuhan. Peugeot’s head coach’s trip to Wuhan was interpreted by both domestic and foreign media as a journey for help. The French local media even made a large report that "PSA is considering a capital increase to cope with the financial crisis."
Subsequently, General Motors, Dongfeng Motor Group has become the "object of scandal" in the PSA. However, with General Motors CEO Dan Eksen and CFO Dan Oman have stated that they will not increase capital PSA, Dongfeng Group has become the focus of this PSA external signing.
Dongfeng insiders disclosed to the Economic Observer reporter that, as long as foreign media reported that PSA started to introduce external investment to survive the financial crisis, PSA had thrown olive branches to several partners such as General Motors and Dongfeng Group, and showed relevant Information and documents.
Subsequently, Dongfeng Group officially launched an investigation into the structure of PSA, and conducted detailed investigations on its current major companies and businesses through its own and related organizations, in particular, the operation of PSA finance companies, parts and components companies, and other non-automotive businesses that were not previously in touch. Investigation of the situation and understanding of the current reasons for the PSA's burning of money. "How did the 5 billion euros go from a year?"
In 2012, PSA performed asset impairment treatment in accordance with International Accounting Standard No. 36 - Asset Impairment, and the net loss on the report was therefore as high as 5.001 billion euros. At present, the Dongfeng Group H stock market value is also less than 100 billion yuan, according to this year's Forbes global company rankings, its operating income is 19.7 billion US dollars, profit 1.4 billion US dollars, total assets of 19.2 billion US dollars, market value of 11.8 billion US dollars.
At the end of June, European media began citing PSA insiders saying that PSA considers selling 30% of its equity to Dongfeng to obtain cash flow. Recently, domestic media also quoted Dongfeng stakeholders as saying Dongfeng hired an investment bank to implement the plan and initially planned to acquire PSA's 30% stake at a price of 10 billion yuan.
From this point of view, this will be Dongfeng Group's largest M&A case to date. However, in an interview with the Economic Observer reporter, Dong Feng Secretary-General Lu Feng denied that 10 billion shares of PSA were acquired.
"At present whether the acquisition is still under discussion, only after looking at the results of the investigation will it formulate a cooperation plan." Lu Feng said.
At present, Dongfeng’s internal opinion is that Dongfeng’s own management structure is still in the stage of combing. If it is necessary to officially launch the acquisition of PSA, it must take constructive advice, especially how to improve the PSA loss situation, otherwise it will be a loss to PSA. "Black ink", Dongfeng will not invest.
Previously, Dongfeng Group's largest foreign cooperation project was a full-scale joint venture with Nissan Motors in 2003. At that time, the project was the most extensive and largest domestic joint venture for the entire vehicle. The negotiation cycle between the two parties was more than 20 months. According to this calculation, even if the optimistic estimate, Dongfeng's merger and acquisition of PSA will not have a clearer result until the middle of next year.
Multiple thresholds
According to previous domestic and international reports, Dongfeng and PSA have all hired third-party agencies to do related investigations, and PSA's buyers are not alone. According to informed sources, PSA hopes that a number of companies can participate in PSA's capital increase and expansion to sell a good price.
In addition to Dongfeng Group, PSA’s second-largest shareholder is also a potential source of capital injection. Although General Motors CEO Ixon said in Shanghai in mid-June that he was attending the groundbreaking ceremony for the exclusive plant of Cadillac Jinqiao in Shanghai, he said that he would not increase capital at the moment, but he also said, “If we see the situation changes, we will evaluate it.â€
In addition, ignoring the possibility of GM joining the PSA lineup, if you want to enter the main PSA, you cannot escape GM. Although it does not seem like Saab has a greater say and does not directly interfere with management, GM also plays an important role in PSA.
On February 28th, 2012, General Motors and PSA Peugeot Citroen formed an alliance. The two sides started cooperation in R&D, procurement and other aspects. They plan to realize annual savings of US$2 billion within five years and start joint launch of new vehicles in 2016. In addition, General Motors also spent 300 million euros to acquire about 7% of PSA shares.
After GM completed the equity acquisition, the shareholding of PSA's largest shareholder, the Peugeot family, fell from 30.3% to 25%, but it still maintained the status of number one shareholder, and GM also promised that it will not interfere with the management of PSA after the acquisition of equity. Matters.
However, over the past year, GM’s equity investment in PSA has shrunk by nearly half. PSA Group's regular operating losses last year amounted to 576 million euros, with a loss rate of 1%. PSA's share price plummeted. When GM's financial status last year was reported in February this year, the market value of its 7% PSA shares was suddenly reduced from 432 million US dollars. To 220 million U.S. dollars. In addition, according to plan, Peugeot Citroen will also consume 1.5 billion euros in capital in 2014. This is also the main reason why the new GM that has just emerged from the financial crisis is unwilling to increase its PSA.
In addition, GM also has two joint ventures between Shanghai GM and SAIC-GM-Wuling in China. Once the DFG enters the PSA, it may affect GM.
According to the above-mentioned Dongfeng insiders, as the second largest shareholder of PSA after the Peugeot family, General Motors knew Dongfeng Group's participation very early, but did not issue any objection. At present, Dongfeng has not yet met with GM to exchange opinions.
Currently, PSA also has a second partner Changan Group in addition to Dongfeng in China. However, according to Changan executives, Changan has not been involved in the PSA merger.
At the end of May this year, during a meeting with the decision-maker of Dongfeng, Thierry Peugeot stated that the Chinese market is an important market in the PSA Group’s globalization strategy. Strengthening the good cooperation with Dongfeng and supporting Shenlong to accelerate development is the PSA's global strategy. The preferred direction.
The contents of other more secretive talks cannot be known. However, as if it were to prove the importance of the Chinese market to PSA, Shenlong Motors presented its unique and enjoyable global performance report to PSA on the Shenlong Automobile's annual board of directors, which was subsequently held in June. At present, PSA has increased its dividend target for Shenlong.
According to a person from the PSA China Region, it is unlikely that the PSA will yield 30% of the equity, because the Peugeot family will lose control.
As the French government has always taken a wait-and-see attitude, external signings have become a last resort for the Peugeot family to save PSA. According to the current share price of PSA, the cost of capital increase is to give up a larger proportion of shares, which will not only dilute the Peugeot family's equity and voting rights, but even lead the Peugeot family to lose control of PSA.
In addition to acquisitions, another possible model is that Dongfeng intervenes in PSA's global business and pays a certain amount of cash. For example, Dongfeng and PSA expanded the scope of joint ventures to global emerging markets.
Earlier, there was news that PSA and Dongfeng Group had negotiated the sale of a 70% stake in Russia's Kaluga Automobile Factory, but no further progress was made.
The PSA Union also stated that it would not like to see the Peugeot family’s equity in the company diluted. Previously, China Investment Co., Ltd. had stake in Daimler on the condition that it would not participate in its management. “Like the Ford family, Ford’s equity ratio is very low, only 6%, but it has 40% of the voting rights. It is very likely that the Peugeot family hopes that Dongfeng will appear as a non-voting shareholder. In addition, the preferred stock is also an option. According to Man Yunlong, a US M & P law firm that has long been engaged in consulting on international M & A business.
This kind of pure equity investment is clearly not Dongfeng’s appeal. For this centrally-owned enterprise, which is full of international ambitions, the experience of obtaining international management from multinational companies is more urgent.
Guotai Junan analyst Zhang Xin also said that in accordance with the actual needs of the current Dongfeng, if the acquisition of PSA shares, it is certain that they want to be able to enter the management, not just the investor, as for the actual investment program, to see what Dongfeng can get from the investment, It doesn't make much sense if you simply hold a stock that does not have voting rights.
However, fighting for the support of trade unions is also one of the difficulties. Many PSA employees uphold a philosophy that they are not working for the company, but for the Peugeot family, and Varan even called the Peugeot family "big housekeeper". Obviously, the mark of the Peugeot family is very profound in this company.
In addition, there is the attitude of the Chinese government. According to a lawyer who had been entrusted by Ford with Volvo to sell the project, the National Development and Reform Commission's examination and approval of overseas investment projects of domestic enterprises generally needs to assess three aspects: the debt situation of the overseas company and whether domestic enterprises have the ability to activate the acquired enterprise. And is it strategic investment? Among them, "is it strategic investment" is the ultimate key to whether or not the approval can be passed. The so-called "strategic investment" is to show positive effects on countries and regions.
According to the common sense of the securities market, Dongfeng Group and PSA are listed companies. Once there are actual acquisitions, there will be relevant announcements. This also confirms that Dongfeng Group and PSA are still in the stage of mutual exploration and indirect investigation of each other's cards. “What we need to consider now is how Dongfeng’s interests are protected. To do this, we must understand the structure and business model of PSA. This is the prerequisite for investment.†Dongfeng people said.
SUZHOU JH DISPLAY&EXHIBITION EQUIPMENT CO.,LTD , https://www.jh-snapframe.com