Automatic battery industry ushered in a new round of investment boom, lithium industry mergers and acquisitions high fever does not retreat. According to statistics, there have been at least 30 large and small mergers and acquisitions in the lithium battery industry in 2017, including hundreds of millions of huge transactions. Details can be found in the "Year-end Inventory: 2017 Top Ten Lithium M&As." In these three dozen mergers and acquisitions, not all of them can accomplish a positive result. Some people will naturally feel that there will be people who worry. The following small series of inventory of the ten cases of failed lithium mergers and acquisitions, and proper analysis of the reasons behind its failure.
1. Siuxin shares terminated the acquisition of Huiqiang New Materials and Alibaba shares
On August 14, 2017, Zhaoxin Co., Ltd. announced the termination of the acquisition of Alibaba shares. Regarding the reason for abandoning Alibaba’s shares, Siuxin shares said that due to the big differences in pricing and valuation between the company’s and Alibaba’s major shareholders, and the conditions and ways in which Alibaba’s related parties docked the capital market for the company. Different opinions have been generated and the two parties have failed to reach an agreement. On August 11th, it signed a cancellation agreement.
On October 31 after the termination of the acquisition of Alibaba shares, Siu Hsin announced that it plans to increase 200 million Jintai potassium fertilizer and 125 million yuan to increase Shanghai Zhong Li.
On November 6, 2017, Siu Hsing announced that the company originally planned to purchase 100% equity of Hui Qiang New Materials by issuing shares and paying cash, but due to the different interests of both parties, the core terms could not be agreed. . After negotiation, the two parties decided to terminate the plan for the major assets reorganization. This formally announced that Zhaoxin's plan to acquire Huiqiang New Materials has failed.
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The acquisition of Siu Sang shares in 2017 was a twist. Firstly, it will terminate the acquisition of Alibaba shares, and plan to increase 200 million Jintai potash fertilizer, and increase 125 million yuan in Shanghai Lithium, and then terminate the plan to acquire Huiqiang new materials. Judging from the content of the announcement, although the reason for the termination of the acquisition of Zhaoxin shares will simply be attributed to the failure of the parties to reach an agreement on the purchase price and trading conditions. However, there is a big deviation between the reasons behind this or the interests of both parties.
2. Xianfeng Holdings terminates acquisition of Huitong Tianxia and Miaosheng Power
On October 20, Xianfeng Holdings Co., Ltd. said that it terminated the acquisition of Shenzhen Huitong Tianxia Technology Co., Ltd. and Miaosheng Power Technology Co., Ltd. Xianfeng Holdings originally planned to purchase not less than 51% of the shares of the two companies by issuing assets to purchase assets, cash purchases or capital increase, and previously signed a framework agreement for the acquisition of shares with counterparties.
However, Xianfeng Holdings stated that due to the fact that the company and the counterparty failed to reach an agreement on the core terms of the transaction plan (transaction price and trading conditions, etc.), after a thorough communication and negotiation with the counterparty, they finally decided to terminate this major asset reorganization. .
It is understood that Shenzhen Huitong Tianxia Technology Co., Ltd.'s main business is the development, production and sales of lithium-ion batteries and batteries. Miaosheng Power Technology Co., Ltd. is mainly engaged in the research, development, production and sales of lithium-ion battery-related products and start-up power supplies. HSBC Holdings suspended trading from the beginning of May this year and planned to purchase the shares of the two companies. However, after more than five months, the plan eventually failed.
Xianfeng Holdings stated that the termination of the planning of major asset reorganization is a result of prudent research by the company and full consultation with related parties. It will not adversely affect the company's production and operation, nor will it affect the company's future development strategy.
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Judging from the current upsurge of companies and mergers and acquisitions in the lithium battery industry, power battery companies have become an important target for the cross-border lithium industry and mergers and acquisitions of listed companies. However, judging from the failure of the acquisition of Huitong Tianxia and Miaosheng Power by Xianfeng Holdings, the acquisition of power battery companies by listed companies is not easy and there are many uncertainties.
3, Ottga acquisition of sea four power
In January 2017, Automaker, a leading automotive air-conditioning compressor company, disclosed a major asset restructuring plan. It plans to pay RMB 2.5 billion for the acquisition of a 100% stake in power battery manufacturer Jiangsu Haisida Power Co., Ltd. by issuing shares. At the same time, Otto Jia will use non-public offering of shares to raise matching funds of no more than 1.55 billion yuan, which will be used to support the target company’s expansion of its power battery capacity, establishment of R&D centers, and payment of intermediary agency fees.
In addition, Aojia Jia has also signed the “Performance Commitment Compensation Agreement†with the target company, and the performance commitments of Fanghai Sida Group, Shen Tao, etc., have not been less than 167 million in net profits in 2017, 2018 and 2019. Yuan, 200 million yuan and 240 million yuan.
On July 31, 2017, Aojia Jia negotiated with the main counterparty and agreed to terminate the purchase of 100% equity of Jiangsu Haisida Power Co., Ltd. and raise matching funds.
As for the major reasons for the termination of the major asset restructuring, Altgart stated that the recent changes in the capital market, policies, and the environment will not be able to meet the original expectations of the parties if it continues to promote this major asset restructuring.
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According to the Performance Commitment Compensation Agreement, performance has a high risk of gambling failure. In the current subsidy declining power battery prices and gross profit decline, and the battery raw material prices, Hai Sida power to complete the three-year over 600 million yuan in net profit commitment pressure is very large, there is a risk of failure in the performance of gambling, from the long-term From the perspective of both sides, it is unfavorable.
In addition, the initial valuation of Haisida Power was 2.51 billion yuan, and the transaction price was 2.5 billion yuan. This valuation is seen in the current industry and Haisida Power’s view, or the price is low, and the two parties may not be in the final purchase price. Talk about the final choice and give up.
4, Changxin Technology acquires BAK battery
On August 8, 2017, Changxin Technology announced that after an agreement with the counterparty, the company decided to terminate the issuance of shares and pay cash for the purchase of 75% of shares in Shenzhen BAK Power Battery Co., Ltd. This also means that since September 2016, the 11-month long letter technology acquisition of BAK Battery's equity has officially failed.
However, if you think this matter is over, then you are wrong. It is reported that Changxin Technology intends to purchase more than 20% of the shares of BAK batteries through self-owned or self-raised funds. After the completion of the purchase, the listed company will hold no more than 29% of BAK battery shares. Changxin Technology hopes to restart the acquisition in the future.
BAK Battery took the lead in promoting intelligent manufacturing upgrades in 2015, building a power battery intelligent manufacturing system, and realizing the platformization, service, and intelligence of production process management. At the base of Zhengzhou BAK, based on artificial intelligence technology, an automated and intelligent unmanned workshop has been built, and the production lines and technologies are at the leading level in the country. For more Baker battery introductions, please check the "Year-end Inventory: 2017 Top Ten Star Lithium Power Business."
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The failure of this merger may be consistent with the failure of Autotech's acquisition of Haisida Power. In this transaction, the two sides signed a performance-to-gambling agreement, and BAK Power's net profit for 2017, 2018 and 2019 will be no less than 700 million, 1.2 billion and 1.25 billion yuan, respectively. The BAK Battery 2014, 2015 and 2016 achieved a net profit of -18.8 million yuan, 26.32 million yuan and 451 million yuan respectively. In the current subsidy declining power battery prices and gross profit decline, and battery raw material prices, the BAK battery to complete the three-year huge net profit commitment pressure is very large, the performance of the risk of gambling is too high.
5, Qunxing toys failed to acquire space-time energy
According to the major asset restructuring plan announced in March, Qunxing Toys planned to acquire 100% equity of space-time energy at a price of RMB 2.9 billion through the issuance of shares, and plans to raise supporting funds of no more than RMB 1 billion for the annual production of 3GWH electric vehicles. Power battery construction project and Ika new energy electric vehicle battery power R&D center project.
In the reorganization plan, Qunxing Toys has declared that the company will quickly enter the field of lithium-ion battery systems for new energy vehicles, thus forming the company's business layout in the core components and parts of new energy vehicles; at the same time, it will go hand in hand with the dual-business model. Decentralizing operational risks can also further enhance the company's future sustainable profitability and overall value.
However, the ideal is very full and the reality is very skinny.
On September 26, 2017, Qunxing Toys, dubbed the “restructured professional household†in the market, announced the termination of major asset restructuring. This is also the third reorganization failure of Qunxing Toys since 2014.
In the announcement of the termination of the restructuring, Qunxing Toys disclosed that if the controlling shareholder of the target company proposed to advance according to the original plan, it would be unfavorable to the target company's shareholders. After the communication, the two parties could not reach an agreement on the core terms of the reorganization of the issue price.
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As a “restructuring professional householdâ€, the failure of regrouping the Group's toys again can not help but feel the eagerness of the new energy vehicles lithium ion battery system field to quickly cut into the urgent mentality. From the case of Qunxing Toys, people can see that the capital market has paid great attention to the field of lithium-ion battery systems for new energy vehicles. On the other hand, it is the urgency of the introduction of capital by the diaphragm enterprises.
6. Shengyang Stocks Failed to Acquire Real-Link Huai'an, Solid Alliance Yancheng Failed
On August 21, 2017, Shengyang shares announced that the company originally planned to pass its industrial M&A investment fund, and 850 million yuan to invest in Lithium-ion battery companies, which will be real-linked Huai'an and Shilian Yancheng. However, due to major changes in the national policies of the industry in which the target company is located, the two target companies did not meet the preconditions for the investment as previously agreed by both parties in the “Equity Investment Framework Agreementâ€, and the company decided to terminate the investment. For almost a year, this key domestic lead-acid battery giant's key layout in the development of lithium batteries has failed.
Shengyang shares said that as of now the company has not actually invested, and will continue to implement the development of new energy areas.
The rapid growth of the new energy automobile market has generated strong demand for power batteries. Under this background, the domestic lead-acid battery giants have accelerated the transition to lithium. However, with Chaowei, Tianneng, Nandu, Shuangdeng and other enterprises through a large-scale self-built power battery company's cut in different ways, Shengyang shares have chosen to set up mergers and acquisitions of investment agencies and funds to access shares of power battery companies cut into the lithium industry.
Compared with the former, the way the latter cuts in can be significantly faster, but the actual situation is not the case.
On October 12, 2016, Shengyang announced that it intends to invest in its real estate investment fund, which will be invested by Shilian Changyi Huai'an Technology Co., Ltd. and Shilian Changyi Yancheng Technology Co., Ltd. The total investment amount was RMB 850 million. After the completion of the equity transfer and capital increase, the industry fund finally obtained 57.24% of the equity interest in Shilian Huaian and Shilian Yancheng.
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The reason for the failure of this merger may be related to the development of the joint initiative. According to the agreement between the two parties, the promised net profits of the two companies during the 2017-2020 performance commitment period are not less than RMB 160 million, 200 million, 300 million, and 380 million, respectively. However, during the merger and acquisition period, the actual joint chief should be in the early stage of business startup, the business has not yet been fully established, the profitability is poor, and there are also large uncertainties in future operations. If the direct investment in mergers and acquisitions, in the short term, the company may continue to Profitability has an adverse effect.
After the termination of the investment, the pace of development of the lithium battery industry in Shengyang's shares will also be hindered. In the case of scarcity of high-quality targets and intensified market competition, it will become even more difficult for Shengyang Group to enter the lithium battery industry again through merger and acquisition.
7. Jinguan Electric acquires lithium new material
On May 16, 2017, Golden Crown Electric announced that it plans to acquire the Hongtu Diaphragm and Lithium New Materials simultaneously and enter the field of lithium battery separators.
On June 22, 2017, Golden Crown Electric issued an announcement stating that the parties to the agreement had repeatedly negotiated and failed to reach an agreement on the acquisition plan. The board of directors of the company reviewed and approved the “About the signing of the cooperation framework between Jinuan Electric Co., Ltd. of Jilin Province and Hunan Lithium New Materials Co., Ltd. Resolution on the Termination Agreement of the Agreement and its Supplemental Agreement.
When the industry moved in the direction of another new standard for lithium, Golden Crown Electric gave the answer: At the same time, it did not select two target companies at the same time. Instead, it chose the Hyundai diaphragm to give up the new lithium material.
The abandonment of mergers and acquisitions to a certain extent also contributed to the success of Changyuan Group's mergers and acquisitions. The details are described in the companion article "Year-end Inventory: The Biggest M&A Case for 2017 Lithium Battery", which is not repeated here.
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In 2017, mergers and acquisitions of the capital market in the field of diaphragms continued one after another. The reason is that the lithium battery separator gross profit rate has been high in the four key materials of lithium batteries, and the profit growth of the company is stable. Lithium new materials for high-quality companies are in fact chasing market capital. For Golden Crown Electric, there are also a lot of convictions. In many failed mergers and acquisitions, it was a rare good result.
8. Snow Wright Fails to Acquire Shenzhen Snow
In March 2017, Shreight suspended the restructuring and planned to purchase 100% equity of Shenzhen Snow, the main business of lithium anode materials, but Shlett announced a temporary announcement on July 8 that it plans to acquire another power battery company. 100% equity, from which the reorganization target has changed from one household to two.
On September 2, 2017, Snowlight announced that it was unable to reach an agreement on the core aspects of the transaction price between the company and Shenzhen Snow's major shareholders, and decided to terminate the acquisition of Shenzhen Snow. Snow Wright disclosed its restructuring plan on September 14th. The company that restructured the target was finally settled and it became a household from two companies. Staged a story of the rebranded "One family has changed two families and two families have changed another".
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The story of the reorganization of the "Singer's two families, two families and another" staged in the Snowsight M&A case. It can be seen that for emerging new energy markets, the most important thing is capital, and the most important ones are high-quality companies. Judging from the intensity of mergers and acquisitions boom, the current lithium battery is already a "wolf is less meat," so the price of corporate mergers and acquisitions is also getting higher and higher, to some extent aggravated the panic of capital.
9. Del will fail to acquire Henan Yiteng New Energy in the future
In June 2016, Dell intends to acquire 85.38% of equity of YT New Energy. In addition, the company originally held a 14.62% stake in YT New Energy. If this acquisition is successful, Del will hold 100% equity of YT Energy in the future. Yiteng New Energy promised to achieve net profit of not less than 200 million yuan, 260 million yuan, and 340 million yuan in 2016, 2017, and 2018 respectively.
However, due to the judicial freeze on the equity held by Suzhou Deji Enterprise Management Center, the largest shareholder of YTD, the acquisition has been delayed since then. In the future, Dell deeply feels that this acquisition is very difficult and hopefully, it made a decision to terminate the acquisition.
On July 4, 2017, Del will hold an investor briefing in the future through online interaction. The chairman, Mr. Ji Jiyong, and related members communicated with investors on the termination of the acquisition of Henan Yiteng New Energy Technology Co., Ltd. .
Del said in the future that the termination of the acquisition of YTT was due to the judicial freeze of one of the transaction related parties, Suzhou Deji Enterprise Management Center. Although the company and related parties continue to push forward solutions, there are many objects involved, the difficulty of resolution is high, and the time for resolution is not controllable. The company believes that the conditions for continuing this major asset restructuring are no longer met, so the decision was terminated. The reason for the termination is not related to the cash flow tension.
Although the acquisition was unexpectedly terminated, Dell will still hold a 14.62% stake in YT New Energy, which means that the 14.62% profit of YTT will be attributed to Dell's future.
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The failure of this merger was related to the judicial freeze of one of the parties involved in the transaction. In addition, the proportion of Yiteng New Energy Dry Process is still relatively large. It is understood that there are 10 existing dry process lines and one wet process line. From the point of view of the diaphragm market environment, the wet method is the trend. In the long run, Del will face the pressure of transformation in the future. It is worth mentioning that, YT New Energy achieved operating revenue of 257 million yuan in 2016, a net profit of 89.675 million yuan, which is far from the original promised net profit of 200 million yuan; facing the risk that performance cannot be realized.
10. Western Mining terminates the acquisition of Qinghai Lithium
In 2016, Western Mining Co., Ltd. announced that it will purchase 100% equity of Sichuan Huidong Beam Mining Co., Ltd. and 100% equity of Qinghai Lithium Industry Co., Ltd. by issuing shares and paying cash.
On August 5, 2017, Western Mining suddenly announced that there was significant uncertainty in the timing of the acquisition of the mining warrants of Qinghai Dongtai Jinel Lithium Resources Co., Ltd., which was originally planned to be purchased by Lithium Resources. Lithium carbonate products constituted a substantial obstacle to the acquisition and the company decided to abandon the acquisition of Qinghai Lithium Industry. Western Mining stated that it will continue to promote the acquisition of 100% shares of Daliang Mining, but the acquisition method was changed from "through the issue of shares and payment of cash" to "purchase money".
It took nearly one and a half years from the announcement of the plan to purchase the assets to the application of the stock suspension to the announcement of the termination of the plan.
However, Western Mining stated that the acquisition of 100% equity of Daliang Mining will not be affected by this incident. In order to complete the integration of Daliang Mining as soon as possible, strengthen the company’s mineral resources reserves, and at the same time protect the interests of all shareholders and improve transaction efficiency, and avoid internal competition with the industry, after careful consideration and friendly negotiation with the counterparty, they decided to use self-raised cash. Way to acquire 100% stake in Daliang Mining.
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Because of a mining warrant, Western Mining continued its merger and acquisition of Lithium Lithium, and because of a mining warrant, Western Mining ended the merger of Qinghai Lithium. Can not help but sigh, high-quality mineral resources reserve is the key to ensure the company's continued profitability and sustainable development. The successful acquisition of any mining company can increase the reserves of metal resources in Western Mining, thereby enhancing the ability of sustainable development and improving profitability.
to sum up
In 2017, it was a year of major changes in the new energy industry. Several policies related to the new energy industry chain were issued one after another. The country is trying to weaken the dependence of the new energy industry on policies and promote the development of industrial independence and standardization. The lithium battery industry is no longer the same year, "closed eyes can make money" and lead to "power battery famine" market, in the period when companies have to expand production capacity, not only the increasingly fierce competition, the rapid reduction of high-quality standard and part of the valuation of the company Too high, making investment risks soar. Therefore, companies need to have a pair of "eye-shadows" when they choose the target, otherwise they will face the risk of merger failure.
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