Shuanghui: On April 26, 2006, Hong Kong Rotex Limited (a subsidiary of Goldman Sachs), authorized by Goldman Sachs Group and CDH China Growth Fund II to participate in the bidding on behalf of the two companies, won the Shuanghui equity auction with 2.01 billion RMB, acquiring 100% of Shuanghui Group's equity and indirectly holding 35.715% of Shuanghui Development's equity.\Little Nurse: Founded in 1992. According to AC Nielsen's survey, Little Nurse had a brand awareness of up to 99%, with a market share of 4.6% in 2003, making it the third-largest skincare brand in China. At the end of 2003, French company L'Oréal acquired Little Nurse.\Uni Lubricants: Once popular throughout China for its slogan 'more lubrication, less friction,' in August 2006, Shell announced the purchase of 75% shares each of 'Beijing Uni Petroleum & Chemical Co., Ltd.' and 'Uni Petroleum & Chemical (Xianyang) Co., Ltd.'.\Robust: In 2000, Robust was acquired by Danone, and now the Robust brand has gradually faded from public view. In addition, Danone also acquired 50% of Shanghai Maling Aquarius Beverages Co., 22.18% of Huiyuan Juice, 50% of Mengniu Dairy, and 20.01% of Bright Dairy in China.\Yinlu: Yinlu is a family-owned food company in Fujian Province, producing products such as Yinlu Eight Treasure Congee and Peanut Milk. Data shows that its sales in 2010 were approximately 5.46 billion RMB. In September of this year, the Ministry of Commerce formally approved Nestlé's acquisition of 60% of Yinlu Food Group ('Yinlu') in a review of the merger under antitrust regulations. During the Xiamen Investment and Trade Fair on September 8, Nestlé, the global food industry giant, finally succeeded in acquiring Yinlu, the food company famous for producing Eight Treasure Congee and Peanut Milk.\Harbin Beer: The oldest beer brand in Chinese history, founded in 1900, and fully acquired in 2004 by Anheuser-Busch (AB), the parent company of Budweiser.\Nanfu Battery: Since September 1999, through several transfers, by 2003, 72% of the shares fell into Gillette's hands. Gillette's Duracell batteries had been in the Chinese market for 10 years, but its market share did not exceed 10% of Nanfu's. Today, this battery brand, once occupying most of the Chinese market and the top domestic brand, no longer belongs to a domestic brand.\Zhonghua Toothpaste: Although still in green packaging, Zhonghua Toothpaste is no longer our childhood memory. In January 1994, Dutch company Unilever gained a controlling stake in Shanghai Toothpaste Factory, and Shanghai Unilever Toothpaste Co., Ltd. was established.The operating rights of the Chinese brand were leased to Unilever.\Supor: Supor Company was founded in August 1994. Supor's brand sales account for 40% of the pressure cooker market, and its brand value is estimated at 1.6248 billion yuan. In August 2006, French SEB (the world's leading small appliance brand) intended to acquire Supor and completed the acquisition plan in 2008, holding 52.74% of Supor's shares and obtaining controlling rights. Currently, Supor is under heavy scrutiny due to involvement in a "quality scandal."\French Danone acquired Wahaha, Robust, Shanghai Maling Zhengguanghe, Wuhan Dongxihu Beer, and holds shares in Huiyuan, Guangming, and Mengniu.\Goldman Sachs invested in acquiring Shuanghui, Yurun, Prince Milk, and Country Garden.\In November 2003, Colgate acquired all shares of China's Yangzhou Sanxiao Group.\French Saint-Gobain wholly acquired Xuzhou Steel Plant, ArcelorMittal acquired Baosteel, and the U.S. Carlyle Group merged with Jiangdu Steel Pipe.\French Suez Group acquired Changzhou Water Treatment Company, and French General Water Company acquired Shanghai Tap Water Pudong Company.\In 2006, the world's largest beer giant, Belgian InBev Beer Group, acquired Fujian Snow Beer. Fujian Snow Beer is the eighth largest brewer in mainland China. In 2006, AB Group acquired Tangshan Brewery.\In 2004, the U.S. John Deere acquired Jiamusi Combine Harvester Factory. Jiamusi Combine Harvester Factory was once the only enterprise in the country capable of producing large-scale combine harvesters, with its products accounting for 95% of the Chinese market. In 1997, U.S. multinational John Deere entered a joint venture with Jiamusi, and by 2004 it was changed to a wholly-owned company, with John Deere replacing the original Jiamusi in the agricultural machinery market, causing China to lose its independent development platform in the large agricultural machinery sector.\Chongqing Tianfu Cola Group Company was one of China's eight major beverage factories in the 1980s and entered a joint venture with Pepsi in 1994. In 2009, Chongqing Tianfu Cola Group Company began taking action to "retrieve" the brand from Pepsi, and Chongqing Fifth Intermediate Court has already opened a hearing.\In 1981, the Tianfu Cola formula was created in Chongqing. It was jointly developed by the then Chongqing Beverage Factory (the predecessor of Tianfu Group) and the Sichuan Provincial Institute of Traditional Chinese Medicine. All ingredients are composed of natural Chinese medicine components, with no hormones. After the formula was developed, it was verified by medical pathology experiments at Tongji Medical University that the Tianfu Cola formula can effectively resist aflatoxin.Aflatoxin, a highly toxic substance classified as a Category 1 carcinogen by the World Health Organization, is extremely easy to produce in foods such as corn, rice, wheat, legumes, meat, milk, and dairy products. In an experiment, one group of mice was fed aflatoxin and distilled water, while another group was fed aflatoxin and Tianfu Cola. In less than a month, all the mice in the first group died, and autopsies showed their livers had all turned black and necrotic; but none of the mice fed Tianfu Cola died, and autopsies revealed their livers were normal. In 1985, when the national leaders visited Chongqing, after drinking "China's own cola," they praised it highly. Upon returning to Beijing, the State Council Administrative Bureau, after strict inspection of Tianfu Cola, designated it as a state banquet beverage. By 1988, the Tianfu Cola Group's affiliated bottling plants had reached 108, producing over 300 million yuan in output value, with profits and taxes exceeding 60 million yuan. In 1990, Tianfu Cola established its first bottling plant in Moscow, the capital of the former Soviet Union. Meanwhile, Japan's Fūbashi Corporation proactively became an agent and set up a company in the World Trade Center in the United States to exclusively sell Tianfu Cola. Chinese-made cola successfully entered the U.S., the birthplace of cola beverages...
Lecai — 20% acquired by Kodak:
Lecai Film (600135), a national brand and one of the pillars of China's photographic materials industry, was once the pride of the Chinese people, able to compete with Kodak and Fujifilm. In October 2003, it formed a joint venture with Kodak, where Kodak exchanged $100 million in cash and other assets for a 20% stake in Lecai Film. This completed Kodak's "triple-step" acquisition strategy in the Chinese market: entering China in 1994, proposing a "full industry acquisition plan" to the Chinese government; reaching the "1998 Agreement" with the Chinese government, investing $1.2 billion to form joint ventures with six of China's seven photographic material companies (excluding Lecai); and in 2003 forming a joint venture with the last Chinese competitor, Lecai, bringing all seven of China's photographic material enterprises into Kodak's fold. Against the backdrop of the industry's shift to digital, Lecai Film's profits and market share have continued to decline in recent years.
Shandong Sankong — acquired by Caterpillar:
Shandong Sankong Machinery Co., Ltd., established in 1958, is a loader manufacturer with a renowned brand active in the Chinese construction machinery market. Sankong's original products were already among the higher-priced domestic offerings. It was acquired by Caterpillar in 2005.China Resources Paints — Acquired by U.S. Valspar Corporation: \ China Resources Paints and Xiangjiang Paints are leaders in China's paint industry. In 2006, they were acquired by the U.S. Valspar Corporation. \Northwest Bearings — Acquired by Germany's FAG: \ Northwest Bearings was once a top enterprise in the national bearing industry and a designated factory producing railway bearings for the Ministry of Railways. In 2001, Northwest Bearings formed a joint venture with Germany's FAG, with the German side holding 51% of the shares. Due to the German side's delayed funding and monopoly over decision-making, Ningxia demanded that Northwest Bearings "start from the overall investment promotion plan and resolutely carry on with the joint venture work." After three consecutive years of losses, the German side acquired all Chinese shares, causing the largest bearing enterprise in the western region to fall into foreign hands, taking 25% of China's railway bearing market share. Later, finding the profits too thin, the German side even stopped producing railway bearings. \ Staff at Northwest Bearings believe that the hasty signing during initial negotiations and blindly seeking success planted the seeds of future failure; relevant department heads also stated that the rush for quick success for the sake of achievements was another important reason not to be overlooked. \ Through the "three-step" strategy of joint venture — controlling shares — sole ownership, the technology, brand, and market of this joint venture company eventually came entirely under German control. Jinxi Chemical Machinery — Drained by Siemens: \ Under the leadership of the Huludao municipal government, Jinxi Chemical Machinery was forced to contribute its turbine branch factory to a joint venture with Siemens, with the foreign side holding a 70% controlling stake. Since then, Jinxi Chemical Machinery lost the source of its core competitiveness and its only profit point, facing a test of survival. \Panda Laundry Detergent — Beheaded by U.S. Procter & Gamble: \ In the early 1990s, the "Panda" laundry detergent from Beijing Second Daily Chemical Factory stood out and was famous in the Chinese detergent market. However, during the "joint venture wave," even prestigious brands like "Panda" could not escape neglect, and in 1994 it entered a joint venture with the U.S. Procter & Gamble. After the joint venture, Procter & Gamble, using its controlling stake, vigorously promoted its own brands "Tide" and "Ariel," while "Panda" was greatly neglected, with its production declining year by year.\The great American empire has money, the big Goldman has schemes, and the Chinese people have stupidity. What are the BRICS countries, the world's number one? Beautiful women find ways to make all their countrymen stupid~~\Golden Dragon Fish – Making bridal clothes for others:\In the late 1980s, a well-known Chinese enterprise cooperated with the private Singaporean Guo Brothers Grain & Oil Company to establish Nanhai Oil & Fat Company in Shenzhen, using the 'Golden Dragon Fish' brand. After more than ten years of joint cultivation, 'Golden Dragon Fish' had become the top domestic edible oil brand. However, the Chinese company later discovered that the 'Golden Dragon Fish' trademark was registered under the name of the Guo brothers, and the brand they had painstakingly nurtured for years actually belonged to someone else—they were making 'bridal clothes' for others. In the end, the Chinese company could only withdraw from the partnership and start developing its own market again.\Dalian Motor Factory, Dalian Second Motor Factory – Acquired by Singaporean West, British Burton:\The original Dalian Motor Factory was once China's largest motor enterprise, always bearing the responsibility of leading the domestic small and medium motor industry in technological development; the original Dalian Second Motor Factory was once a flagship enterprise of the Ministry of Machinery, producing hoisting and metallurgical motors. In 1996 and 1998, the two motor factories, respectively, entered joint ventures with foreign companies (Singaporean West, British Burton), which took control of operations and sales channels, resulting in consecutive losses and massive hidden income flowing abroad. After liquidating the joint venture enterprises, the foreign investors acquired all Chinese shares, completing the 'joint venture, make losses, wholly-owned' trilogy in just three years. The joint ventures not only failed to achieve the original goal of rescuing state-owned enterprises but also caused massive loss of state assets, with more than half of the employees losing their jobs, leaving the government with a heavy burden, and dismantling the platform for industry technology and independent innovation that the country had cultivated for years.\Xuejin Beer – Acquired by Belgian Anheuser-Busch InBev:\The world's largest brewer, the Belgium-headquartered InBev Beer Group, agreed to acquire China's Fujian Xuejin Brewery for approximately 752 million USD. This acquisition will make InBev the second-largest brewer in China, the world's largest beer market, with a 12% market share, second only to Tsingtao Brewery Group.\Red Star Electric Iron – Acquired by SEB:\By 2000, Red Star products were almost everywhere in every major city in every province of China, with a market share as high as 95%.It was precisely due to the value of its market sales channels that SEB established a joint venture factory with Red Star in 1996 and realized a full acquisition in 2001. At that time, there was a debate between the two sides over whether to sell in the Chinese market under the SEB brand or the Red Star brand. Eventually, the Red Star brand disappeared from view in a very short period of time, marking the end of the debate.
Shulei — acquired by Beiersdorf:
Germany's well-known daily chemical giant Beiersdorf announced on the 2nd that it invested approximately 270 million euros to acquire 85% of the shares of Shibao Daily Chemicals, the largest hair care enterprise in China under the Shibao Group.
Baijiahei — acquired by Bayer Germany:
In October last year, Qidong Gaitianli, a subsidiary of Dongsheng Holdings, signed an agreement with Bayer to transfer its OTC Western medicine business for cold and cough relief to Bayer. These businesses include three non-prescription medicine brands: "Baijiahei" cold tablets, "Xiaobai" syrup, and "Xinli" cough syrup, along with the related production facilities and nationwide sales network.
In February 2007, Sumitomo Corporation and Sumitomo Corporation (China) Limited purchased 16% and 4% equity of Henan Tianfang Pharmaceutical Group, respectively. As a result, Tianfang Pharmaceutical transformed from a state-owned enterprise to a Sino-foreign joint venture. (Currently, most domestic pharmaceutical companies are joint ventures controlled by foreign capital.)
North America's largest consumer electronics retailer, Best Buy, acquired 51% of the domestic fourth-largest home appliance chain, Jiangsu Five Star Electric, for $180 million, officially entering the Chinese market.
Huayao Group: The largest antibiotic production base in China, with sales revenue of 7.8 billion yuan in 2004, ranking second in the industry. In 2005, it fell to fourth in the industry, suffering a loss of 20 million yuan. The company fell into debt difficulties. In 2004, it underwent equity reform, converting its 407 million state-owned shares of the listed company "North China Pharmaceutical" into 1 billion yuan, and selling another 58.2 million state-owned shares for 200 million yuan to Dutch DSM (Europe's largest raw drug manufacturer), together settling the debt owed by North China Pharmaceutical. DSM thereby obtained a 7.4% stake in North China Pharmaceutical. In February 2007, DSM purchased a 25% stake in North China Pharmaceutical for 35 million dollars; additionally, it invested 106 million dollars to cooperate with Huayao Group's penicillin and vitamin businesses to establish a new company, holding 49% of the shares. DSM became the second-largest shareholder of North China Pharmaceutical.
Harbin Pharmaceutical Group: In 2005, Hong Kong CITIC Capital and U.S. Warburg Pincus jointly invested to gain controlling interest.\Huiyuan\ Coca-Cola's acquisition of Huiyuan for 17.9 billion yuan was a spectacular takeover. Despite the many calls to protect national enterprises, the result was an unbelievably bitter reality. Soon after jointly announcing the acquisition offer with Huiyuan, Li Xiaojun, Vice President of Coca-Cola China, publicly stated in a media interview that the Huiyuan brand is owned by Huiyuan's Hong Kong-listed company, and nearly 60% of the shares of the Hong Kong-listed Huiyuan company are held by Danone, foreign public shareholders, and a U.S. private investment fund. Therefore, the ownership of the brand changed from one foreign company to another before and after the transaction, with no loss of a national brand. At that time, the media discovered that Huiyuan Juice's detailed registered address was: Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman Islands, which is an offshore company.
In May 2006, the U.S. CVC (an investment management company jointly established by Citigroup and Asia-Pacific Enterprise Investment Management) acquired China's leading paper company, Chenming Paper Group.
The German company Beiersdorf, which produces Nivea, intended to acquire China's largest hair care enterprise, Sipo Group, including its four major hair care brands: Shulei, Fengying, Shunshuang, and Meitao, for nearly 2 billion yuan.
Yihai Kerry Group is a diversified enterprise group in China invested by Singapore's Wilmar International Limited, focusing on grain and oil processing, oil chemical industry, warehousing and logistics, and domestic and foreign trade. It is also the largest grain and oil processing group in China, owning well-known brands such as "Golden Dragon Fish," "Koufu," and "Hujihua," and occupies half of the Chinese edible oil market.
On July 11, 2011, Nestlé announced that it had signed a cooperation agreement with the founding family of Xu Fu Ji. According to the agreement, Nestlé intended to acquire approximately 2.1 billion Singapore dollars (about 11.1 billion yuan) for 60% of Xu Fu Ji's shares, thereby becoming the largest shareholder. Nestlé stated that Xu Fu Ji's products, such as candies, cereal snacks, and Sachima, complement Nestlé's existing product lines in China, and they aim to increase the proportion of revenue from emerging markets from the current 38% to 45% by 2020.
It is reported that Xu Fu Ji is one of China's largest candy brands and confectionery companies and was listed in Singapore in 2006. Data show that in the first three quarters of fiscal 2011, Xu Fu Ji's net profit was 675.8 million yuan, an increase of 17.6% year-on-year, and sales revenue reached 4.37 billion yuan, a year-on-year increase of 23%.\Philips Acquires Pentium\ On July 11, 2011, Philips Electronics officially announced that it would acquire the Chinese kitchen appliance giant Pentium Electric (Shanghai) Co., Ltd. The acquisition is expected to be completed in the fourth quarter of this year. According to reports, the acquisition amount is approximately 2.5 billion yuan.\ Yum Acquires Little Sheep\ On May 14, 2011, the American fast-food giant Yum! Brands and China's 'Number One Hotpot' Little Sheep Group Co., Ltd. jointly announced that Yum! Brands would acquire Little Sheep for a cash premium of about 30%. After the acquisition is completed, Yum! Brands is expected to hold approximately 93.2% of Little Sheep's issued share capital, and Little Sheep will be delisted from the Hong Kong Stock Exchange.\ Financial reports show that Little Sheep is in a steady growth period. Net profits from 2008 to 2010 were 128 million, 133 million, and 155 million yuan respectively. In recent years, Yum! Brands has once again focused on overseas expansion as a business priority, planning that by 2015, 75% of the company's profits will come from international operations.\ Vitality 28: In 1996, after entering a joint venture with Germany's Miele, the commitment that 50% of the laundry detergent produced by the joint venture would use the 'Vitality 28' brand was not fulfilled. In the first three years, a total of 184 million yuan was spent on advertising for 'Vitality 28', which became a futile effort. The well-known 'Vitality 28' brand gradually faded from people's memory.\ Wahaha: When French company Danone acquired Wahaha, Wahaha's CEO Zong Qinghou once waved the flag of nationalism to stir the patriotic feelings of the general public. However, a few years before the acquisition debate, Zong Qinghou had already obtained a U.S. green card and had effectively become an American. Hey, what kind of national sentiment can an American discuss with us?\ Some City Aquatic Companies: The water we drink must be our own, right? Not necessarily. You might not believe it, but in many cities, we actually drink foreign water. Consider France's Veolia and its 'brilliant achievements' in China: entered the Chinese urban water market in 1997, won a 20-year concession contract for Tianjin Lingzhuang Water Plant; in 2002 acquired 50% of Shanghai Pudong Water Company for a 50-year operation; in 2007 obtained 45% of Lanzhou Water Supply; in March received 50% of Haikou Water Group; in September took over 49% of Tianjin Northern Water Company, expanding service coverage in Tianjin to 200 square kilometers. Foreign capital represented by Veolia is advancing steadily, gradually taking over China's water resources!One of the world's top 500 companies and the largest spirits group globally, the British company Diageo, recently signed an agreement with Quanshing Group to increase its stake in the latter by 4%. If this transaction is completed, Diageo's shareholding in Quanshing Group will rise from 49% to 53%, making it its largest shareholder. Consequently, Quanshing's flagship brand, Shuijingfang, will naturally come under its umbrella.
The international private equity fund PAG took over 67.4% of Goodbaby Group's shares; (China's largest baby stroller manufacturer)
On December 6, 2010, Coty Inc., the world's leading perfume manufacturer and the fifth-largest cosmetics company, officially announced a share purchase agreement with Dingjiayi. Coty acquired the majority of Dingjiayi Holding Company's shares.
Holcim, Morgan Stanley, Ireland's CRH, and the joint investment of Morgan Stanley with CDH acquired China's four major cement brands: Huaxin, Conch, Yatai, and Shanshui.
French Saint-Gobain acquired Xuzhou Steel Plant wholly;
ArcelorMittal acquired Baogang;
U.S.-based Carlyle Group acquired Jiangdu Steel Pipe.
French Michelin acquired China's largest tire manufacturer, Hailun Tire Group; Giti Tire acquired Donghua Tire.
Torrington acquired Wuxi Bearings;
Schaeffler acquired Northwest Fuanjie Bearings;
U.S. TIMKEN (world's third largest, U.S. largest SKF bearings) acquired Yantai Bearings;
ABB acquired Hefei Transformer Factory;
Japan's Toshiba acquired Changzhou Transformer Factory;
Britain's Burton acquired Dalian Motor Factory, Siemens acquired Jinxi Chemical Machinery.
The world's largest multinational construction machinery company, the U.S. Caterpillar, acquired Shandong Mining Machinery, Liugong, and Xiamen Engineering Machinery.
U.S. Handing acquired Yuchai Construction Machinery.
Looking at the wide array of foreign brands in the products we consume today:
From the U.S.: McDonald's, KFC, Coca-Cola, Starbucks, Walmart, Nike, Amway
From Japan: Toshiba, Sony, Matsushita, Hitachi, Honda, Toyota, Shiseido
From South Korea: Samsung, LG, Hyundai, Amorepacific
From Germany: Audi, BMW, Mercedes-Benz, Siemens, Adidas
From France: LV, Carrefour, Lacoste, Pierre Cardin, Chanel, Lancôme, L'Oréal
From Switzerland: Rolex, Longines, Omega, Victorinox
From the U.K.: Rolls-Royce
From Italy: Fiat, Ferrari... and so on and so forth!The 28 major industries are: banking, insurance, telecommunications, automobiles, logistics, retail, machinery manufacturing, energy, steel, IT, internet, real estate, light industry, chemicals, pharmaceuticals, machinery, electronics, microelectronics, clothing, and food. Among the 28 major industries in China, foreign capital controls 21! This fact indicates that China's economic issue is not privatization, but economic colonization.
In the industries that have been opened in China, in each industry, the top 5 companies are almost all controlled by foreign capital: in 21 of the 28 major industries in China, foreign capital holds majority asset control. From the perspective of industries, sectors such as banking, insurance, telecommunications, automobiles, logistics, retail, machinery manufacturing, energy, steel, IT, internet, and real estate have all already seen foreign capital entering. Among the acquirers, American multinational companies are the most numerous, accounting for over 30%, followed by EU companies at about 27%, with the rest from ASEAN countries, Japan, etc. In terms of funding sources, foreign acquisition funds mainly include two types: multinational corporations, QFII, and various private equity funds, and in recent years, international private equity funds have gradually become the main players in mergers and acquisitions.
The "elite" like to say, open the country's doors and dance with wolves. But the reality is harsh. We are not dancing with the wolves; we are being devoured by them. In "Soldier Assault," the exercise between Old A and Regiment 702, the commander of Regiment 702 himself evaluated the exercise, saying, neither the attack succeeded nor the defense succeeded. The so-called attacking Regiment 353 launched no meaningful offensive throughout the exercise. The defending Blue Army initially attacked on all sides with inferior forces, and the numerical and firepower advantages of Regiment 353's heavily armed troops could not be leveraged at all; to this day, they did not even determine the location of the Blue Army command. But if the "elite" evaluated this exercise, they would shamelessly say, who says we lost? We even captured a lieutenant colonel.
Let's look at the extent of foreign control across various industries:
1. Minerals
The prospective reserves of the Lanniugou Gold Mine in Guizhou exceed 150 tons, the proven reserves of the Boka Gold Mine in Yunnan are 150 tons, and the prospective reserves of Mao Ling Gold Mine in Yingkou City, Liaoning reach 300 tons. These three world-class large gold mines were easily taken over by foreign capital, with foreign holdings of 85%, 90%, and 79% respectively.
2. Banking
1) Industrial and Commercial Bank of China (ICBC): In 2006, Goldman Sachs from the United States, Allianz Group from Germany, and American Express invested $3.78 billion (about 29.5 billion RMB) in ICBC, acquiring a 10% stake at a purchase price of 1.16 yuan per share.After going public, based on the intraday price of 6.77 yuan on January 4, 2007, the market value reached a maximum of 275.5 billion yuan. Three foreign companies earned a net profit of 246 billion yuan, with investment returns of 9.3 times in less than a year, which is rare in the world.\2). Bank of China: The Royal Bank of Scotland, Temasek Holdings of Singapore, UBS Group, and the Asian Development Bank invested a total of 5.175 billion USD (approximately 40.3 billion yuan) in Bank of China, with an acquisition price of 1.22 yuan per share. After going public, based on the intraday price of 6.26 yuan on May 10, 2007, the market value reached a maximum of 282.2 billion yuan. The four foreign companies earned a net profit of 241.9 billion yuan, with investment returns of 6.6 times in less than a year.\3). Industrial Bank: In 2006, Hong Kong Hang Seng Bank, Singapore's New Monetary Bank, and the International Finance Corporation jointly invested 2.7 billion yuan to purchase 1 billion shares of Industrial Bank at a price of 2.7 yuan per share. After going public, the stock price rose to over 37 yuan, and the three foreign companies earned a net profit of 37 billion. According to the "Reference News" on February 12, 2007, there have been returns of over 300% each year since then. The bank raised a total of 15.995 billion yuan through its IPO, essentially all going to the three foreign companies. The domestic issuance price was 15.98 yuan per share, attracting online and offline subscription funds of up to 1,161 billion yuan.\4). Shenzhen Development Bank: American Newbridge Investment Group bought 348 million shares of Shenzhen Development Bank at 3.5 yuan per share. The current stock price has reached 35.8 yuan, increasing the investment tenfold. Based on over 2 billion shares of Shenzhen Development Bank, Newbridge turned 1.218 billion yuan into more than 70 billion yuan. According to Newbridge's current methods, it will soon reach 100 billion yuan. However, Newbridge itself is a market operator, not a bank, so how can it improve China's bank governance structure? Moreover, the whole bank was taken over by Americans; even if there were improvements, what significance would it have for China?\5). Huaxia Bank: A consortium formed by Deutsche Bank and Saar Oppenheim Bank invested 2.6 billion yuan to purchase about 587.2 million shares of Huaxia Bank, accounting for 14% of the total shares. The purchase price was 4.5 yuan per share; now it is nearly 14 yuan, netting over 5.6 billion yuan. Currently, it is controlled by the German bank, with 50 billion yuan falling into their hands. At present, the Germans have formed joint control over Huaxia, so while nominally a Chinese bank, it has essentially become a foreign-controlled bank.\6). Bank of Communications: HSBC holds 19.9% of the shares of Bank of Communications, investing 14.461 billion yuan to purchase 9.115 billion shares at 1.86 yuan per share.Bank of Communications: Listed in Hong Kong in May 2006, its current market price exceeds HKD 10, with a net profit of nearly over 80 billion yuan. In 2007, the domestic A-shares listing earned another over 50 billion yuan, totaling nearly 140 billion yuan, a 10-fold return.
7). China Construction Bank: Before listing, Bank of America and Temasek invested USD 2.5 billion and USD 1.46 billion respectively to purchase 9% and 5.1% of CCB's shares, at a price of HKD 0.94 per share. The issue price was HKD 2.35 per share, with a peak market price of HKD 5.35 per share. Based on the current total of 224.7 billion CCB shares, the two institutions earned a net profit of over HKD 130 billion.
8). Shanghai Pudong Development Bank: Citigroup invested USD 67 million to acquire 4.62% of Pudong Development Bank, over 180 million shares at about HKD 2.96 per share, with an agreement stipulating that Citigroup would have the right to acquire 19.9% of the shares in the future. Currently, Pudong Development Bank's stock price exceeds HKD 38, with Citigroup netting HKD 6.2 billion. Citigroup has not yet exercised its option; once exercised, it would earn several times that amount.
9). China Minsheng Bank: In 2004, Temasek Holdings' Asian Financial Company acquired 236 million shares of Minsheng Bank at USD 110 million (about RMB 800 million), accounting for 4.55% of the bank, at about HKD 3.72 per share. The stock now exceeds HKD 12, and with dividends over two years, the market value reaches HKD 5 billion, a net profit of about HKD 4 billion.
10). Guangdong Development Bank: In 2006, Citibank of the US, under a joint acquisition, invested only about 6 billion yuan to control Guangdong Development Bank, which had total assets of 355.8 billion yuan, 27 branches, 502 outlets, and agency relationships with 917 banks in 83 countries and regions, ranking among the top 500 global banks for many years. Additionally, China Mobile, State Grid, and China Trust each contributed 6 billion yuan, totaling 18 billion yuan. Giving away the bank for free and adding another 18 billion completely exceeds the normal market exchange.
11). Bohai Bank and local banks: In 2005, China's first joint-stock bank, Bohai Bank, announced that Standard Chartered Bank acquired 19.9% of the soon-to-be-established bank for USD 123 million, becoming the second-largest shareholder. Besides Bohai Bank, Standard Chartered also invested in China Everbright Bank, with the transaction expected to complete by the end of this year. Currently, foreign banks in China have entered a period of accelerated development, and all Chinese banks without exception have been invested in or controlled by 18 foreign banks.\3: Insurance\1). Ping An Insurance Company of China, Ltd.: Ping An is China's first joint-stock insurance company and also the first insurance company to introduce foreign capital. HSBC Group is Ping An's largest foreign shareholder. HSBC invested 600 million USD and 5 billion RMB in Ping An in 2002; Ping An Group successfully listed in Hong Kong on June 24, 2004, with an issue price of HKD 11.88, which has now risen to HKD 40. In February this year, it also raised RMB 38.8 billion through A-shares. As of June 30, 2006, the group's total assets were RMB 358.718 billion, with total equity of RMB 38.104 billion. Currently, the company's market value is nearly HKD 200 billion, and A-shares are 550 billion RMB.\2). New China Life Insurance: New China Life Insurance is about to be listed. Currently, Zurich Insurance holds 22.8 million shares of New China Life at RMB 5.25 per share, accounting for 19% of shares, making it the largest single shareholder of New China Life. In fact, the actual controller of New China Life is the Oriental Group. Since Oriental Industry and Oriental Group respectively hold 5% and 8.02% of New China Life's shares, and Oriental Group also holds shares of other New China Life shareholders, Oriental Group directly or indirectly controls more than 20% of New China Life's shares. (It is said that Zurich has covertly controlled over 56% through a Chinese company, investing 3.4 billion RMB. Once listed, the market value will be at least 60 billion.)\2). Mantulin Forestry: In 2005, it obtained 195 million USD to acquire timber in China through the assistance of the Morgan consortium. It colluded with local officials in Anhui to massively purchase well-stocked forest land. Nearly 2 million mu have been acquired (due to opposition from Anhui farmers, the actual acquisition area remains to be verified). In Anhui, it has been vigorously logging the purchased trees. In Huanggang, Hubei, it agreed in 2007 to acquire 1 million mu of well-stocked forest land (the Huanggang city government stated that as of June 2008, the actual acquisition was less than 30,000 mu). Its reach has extended to Sichuan and Jiangxi, but the acquisition area is unknown.\3). Indonesia's Golden Agri-Resources Group (APP) has for many years used methods in Yunnan, Hainan, Guangxi, and Guangdong by signing large-scale land lease agreements with local governments to destroy natural forests and create large areas of artificial eucalyptus plantations. 5. Agriculture and Animal Husbandry\6. Others, such as\1) Beer industry: over 60 large and medium-sized enterprises now only have two national brands left, Tsingtao and Yanjing; the rest are all joint ventures. Glass industry: the largest 5 are all joint ventures.\2) Elevator industry: the largest 5 are all foreign-controlled, accounting for over 80% of national production.\3) Home appliance industry: among 18 state-designated enterprises, 11 are joint ventures.4) Cosmetics: Controlled by 150 foreign companies; 5) Pharmaceutical industry: 20% controlled by foreign investors; 6) Automotive industry: Foreign brands account for 90% of sales; 7) Mobile phone industry: Due to local companies purchasing most upstream technology, key components, and even production lines from multinational companies; 8) In the photosensitive materials industry, U.S. Kodak implemented a full-industry acquisition in China with only $375 million in 1998, and in 2003 acquired 20% of the state-owned shares of Lucky, holding at least 50% of the Chinese photosensitive materials market. Fujifilm's market share in China exceeds 25%. According to the State Administration for Industry and Commerce: U.S. Microsoft holds 95% of the Chinese computer operating system market, Swedish Tetra Pak holds 95% of China's flexible packaging market, and French Michelin holds 70% of the Chinese radial tire market.
After talking so much about acquisitions by foreign companies... now let's look at examples of domestic brands acquiring foreign companies.
Unico is the ninth largest oil company in the U.S. Due to poor management and other reasons, it suffered losses for consecutive years and filed for bankruptcy, and in January 2005 was listed for sale. After Unico was listed, foreign reports indicated that CNOOC planned to acquire Unico at $13 billion. At that time, Unico's market value was less than $10 billion, and CNOOC's acquisition price was highly competitive, also considered by industry insiders to be the most promising bidder. However, the result ended in CNOOC's failure.
Acquiring a bankrupt company at $13 billion when its market value is less than $10 billion, and being obstructed in every way until losing face—what kind of market behavior is this?
2. Haier Group acquires U.S. Maytag
In June 2005, it was confirmed that Haier intended to acquire the third-largest U.S. home appliance manufacturer, Maytag. Just one month later, Haier announced it would withdraw from the competition. Insiders indicated that although Haier is currently privately managed, it is still state-controlled, so a merger and acquisition would not be possible.
Maytag is a U.S. appliance manufacturer and a bankrupt company listed for sale, currently owing nearly $1 billion in debt. Haier's bid was $16 per share, totaling $1.28 billion, to acquire a bankrupt company. This also drew high attention and concern in the U.S. This happened in a highly developed market economy like the U.S.—isn't this an enormous joke???
3. Huawei acquires 3Com
In September 2007, Bain Capital teamed up with Huawei to announce a $2.2 billion acquisition of 3Com. However, after this announcement, it caused concern among some people who believed it would threaten U.S. national security.As a result, this merger and acquisition case has also faced numerous obstacles. According to foreign media reports, U.S. private equity firm Bain Capital announced this Thursday that due to obstruction from U.S. security authorities, it has now decided to completely abandon the plan to acquire 3Com. Earlier, some analysts had already predicted that this deal would end in failure.
Lenovo's Acquisition of IBM's Global PC Business
On May 1, Lenovo Group Limited completed the acquisition of IBM's global PC business. The newly merged Lenovo will become the world's third-largest PC manufacturer with annual sales of $13 billion. The new Lenovo holds one-third of the Chinese personal computer market and a leading position in the global enterprise PC market. Lenovo's strong capabilities include the internationally renowned "Think" laptop brand and the well-known Lenovo brand in China.
According to the terms of the acquisition deal, Lenovo paid IBM $1.25 billion, including about $650 million in cash and Lenovo shares worth $600 million based on the stock closing price on the last trading day before the transaction was announced in December 2004. Upon completion of the deal, IBM will hold an 18.9% stake in Lenovo. In addition, Lenovo will assume net liabilities of about $500 million from IBM. The consolidation of Lenovo's personal computer business will result in annual revenue of approximately $13 billion and annual PC sales of about 14 million units.
BenQ Acquires Siemens Mobile Division
The continuously loss-making Siemens mobile division, which suffered a loss of 500 million euros (about $613 million), was acquired last month by BenQ, Taiwan's largest mobile phone manufacturer. As a result, BenQ has risen to become the world's fourth-largest mobile phone brand. According to the agreement between the two parties, before October 1 this year, Siemens will cover the previous losses of the Siemens mobile division and transfer the division to BenQ with net assets free of debt. At the same time, Siemens will provide BenQ with 250 million euros in cash and services to invest in the future development, marketing, and brand promotion of key mobile patents. In addition, Siemens will purchase 50 million euros worth of BenQ shares, approximately 2.5% based on the current BenQ stock price, becoming a strategic shareholder of BenQ. In this transaction, BenQ will be able to use all mobile-related patents from Siemens for free.In the deal reached between Siemens and BenQ, it was agreed that starting from October 1, 2005, Siemens' mobile phone division would transfer its assets entirely to BenQ on a net debt-free basis, including cash, R&D centers, related intellectual property, manufacturing plants, production equipment, and personnel. BenQ would begin to bear all production and labor costs.\Eastcom, a telecommunications equipment manufacturer based in Shanghai, recently acquired 19% of Interwave, a California-based company already listed on Nasdaq. Interwave primarily engages in the production of GSM/GPRS network equipment and provision of system solutions. As part of the agreement, Interwave will purchase $25 million worth of equipment from Eastcom each year.\Guangdong Midea Group invested $20 million to purchase Sanyo Electric's microwave oven business in Japan and transferred the related personnel and equipment to the company's production base in China.\BOE Technology Group, a state-owned enterprise, had revenue of 9.11 billion RMB in 2002. BOE invested $30.8 million to acquire Hyundai Display Technology Co., Ltd., a wholly owned subsidiary of South Korea's Hyundai Group. Hyundai Display Technology produces TFT-LCD screens mainly used in laptops, desktop computers, and TVs. After acquiring Hyundai Display Technology, BOE became the world's 9th largest TFT-LCD screen manufacturer.\Shanghai Electric Group (SEC), the largest company in China designing, manufacturing, and selling power and mechanical equipment, spent $23 million to acquire Japan's renowned printing machinery manufacturer Akiyama International Co. (AIC) along with all its color printing equipment and technology. Shanghai Electric now holds a controlling interest in this Japanese company and will continue using the AIC brand in the Chinese market.\Zhejiang Wanxiang Group, an auto parts supplier with products sold in over 40 countries and listed among China's top 500 enterprises, acquired a majority stake in the U.S.-based UAI Company, becoming its largest shareholder. Headquartered in Chicago, UAI mainly manufactures and sells brake systems and components, and is one of the major suppliers for such products in the U.S. aftermarket. Zhejiang Wanxiang Group and UAI's board formed a joint chairmanship.The company established the Wanxiang America Fund in Elgin, Illinois. The fund mainly helps UAI's clients and other American auto parts companies source raw materials and components in China, while also seeking merger and acquisition opportunities in the U.S. for Chinese companies.\Guangzhou Pearl River Piano Factory entered the U.S. market by setting up an office and design center in California. Pearl River Piano Factory employed an American management team and technical support staff, who applied a multi-brand strategy targeting different market segments in the U.S. They retained the Pearl River trademark while adding the Herman Miller brand, which features an American modern furniture design style, and acquired the German Rudisheimer brand. To American consumers, piano manufacturers such as Steinway & Sons and Bechstein from Germany are symbols of high-end piano craftsmanship, so Pearl River used the Rudisheimer brand to target the high-end piano market in the U.S. Currently, Pearl River Piano Factory has captured 40% of the U.S. vertical piano market and has made breakthrough progress in the U.S. baby grand piano market.
