The only thing left is to let time answer.
Editor’s note: This article is from WeChat public account “investment community” (ID :pedaily2012), author Ren Qian.
The 10th working day after Gaochun Capital won the 40 billion “equity dispute” of Gree Electric has made new progress in this highly anticipated transaction.
Investment sector (WeChat ID: pedaily2012) On the evening of November 11, Gree Electric announced that the Gree Group had informed the company that Zhuhai Mingjun and Gree Group continued to continue due to the unresolved issues in the share transfer agreement. After the negotiation, the two parties agreed to postpone the planned signing date of the share transfer agreement. The company will maintain close contact with Gree Group and fulfill its information disclosure obligations in strict accordance with the relevant laws and regulations in accordance with the progress of related matters.
In fact, after obtaining a 15% stake in Gree Electric, Zhuhai Mingjun, who participated in Gree’s mixed reform, has invited the management of Gree Electric to cooperate. According to the plan, Zhuhai Mingjun should have signed a share transfer agreement with Gree Group recently.
“Good things are more greasy.” A close trader told the investment community that “although Gree and Gaochun have delayed signing, it is undeniable that both the market, the investors and the industry are full of expectations for the chemical reaction that occurs after the sorghum is in the Gree. .”
Anxiety on the 10th: Gree management has not yet “nod”?
This is a classic battle in the history of China’s PE.
At the end of March this year, Gree Electric Co., Ltd. said that it received a notice from the controlling shareholder Gree Group that Gree Group plans to transfer some of the shares of Gree Electric Appliances held by the company, which may involve changes in the company’s control. A few days later, Gree Group announced the plan to transfer the equity of 15% Gree Electric. The industry estimates that the equity transfer value exceeds 40 billion yuan.
After the long public collection stage, Gao Lei, led by Zhang Lei, and Houpu Investment, which was run by Fang Fenglei, became two potential equity transferees.
On the evening of October 28, Gree Electric Appliances issued the “Announcement on the Result of the Controlling Shareholders Proposing to Transfer Part of the Shares of the Company to Collect the Transferee of the Company” (hereinafter referred to as the “Announcement”), officially promulgating the Zhuhai Mingjun Investment Partnership (Limited Partnership) ) To become the transferee of the 15% stake in Gree Electric Appliances, the Gree Group with the background of state-owned assets only retained 3.22% of the shares, giving up 23 years ofThe position of the largest shareholder, Gree Electric took the first step.
However, at the time, the Notice stated that the intended transferee should sign a share transfer agreement with Gree within 10 working days from the date of being determined as the ultimate transferee (ie, the date of this announcement). The signed Share Transfer Agreement is still subject to the approval of the state-owned assets supervision and administration authority and other authorized government departments, and whether it can be approved and whether the share transfer can be finalized is still “undefined.”
The Announcement also mentioned that Zhuhai Mingjun has submitted a cooperation invitation to the management of Gree Electric Appliances in the form of a written invitation to the letter of intent. If the management of Gree Electric finally accepts the invitation of Zhuhai Mingjun, and according to the letter of intent The proposed invitation scheme will be carried out. Both parties shall clarify and disclose the specific cooperation plan before Zhuhai Mingjun and Gree Group sign the “Share Transfer Agreement” for this public collection.
This also means that in addition to Zhuhai SASAC and Gree Group, the final conclusion of the transaction depends on whether the management represented by Dong Mingzhu “nods”.
Going to the top, still need to cross three big exams
Before entering the Gree and generating a chemical reaction, the outside world is more concerned about how Gaochun will handle the relationship with management. Where will Gree eventually go? Looking at it now, these issues may still be unresolved. Earlier, the Securities Times commented that Gaochun Capital entered Gree Electric at least three major exams.
First of all, it is to handle the relationship between the existing management of Gree Electric and realize the smooth transition of the company after the new major shareholders enter.
As we all know, Dong Mingzhu is known for his strong position and is very concerned about the management’s absolute controlling interest. From the information revealed by Dong Mingzhu’s latest interview, she did not participate in the above equity transfer.
Dong Mingzhu once made it clear that “Gree needs companies that are sincerely willing to help Gree Electric Appliances develop”, “The transaction will never accept the participation of barbarians.” As the Gree Electric “Mother”, Zhuhai SASAC and Gree Group’s requirements for the transferee are far more than “rich”, and they have the ability to introduce effective technical, market and industrial synergy strategic resources for listed companies, even It is a resource to promote the upgrading and integration of Zhuhai industry.
However, it is not uncommon for entrepreneurs to treat new investment institutions as “barbarians” and their suspicions. Dealing with the existing management relationship with Gree Electric is the most urgent task in front of Gaochun Capital.
Second, the industry empowers and helps Gree Electric accelerate its diversified development strategy. This is the focus of the next market.
In the home appliance market, Gree and Beauty are often compared. As of the close of the 11th, Gree’s market value was 368 billion yuan, while the US market value was 397.6 billion yuan. It is widely believed in the industry that Gree’s market value has always been lower than that of the United States and is related to diversification and internationalization.
“Good air conditioning, GreeThe slogan of “made” has been deeply rooted in the hearts of the people, but in addition to air conditioning, other products like refrigerators, kitchen appliances and other products are not strong, air-conditioning products become a disadvantage in a certain sense. In 2018, Gree In the global air-conditioning market, the market share has reached 20.6%. It is easy to imagine the difficulty of the next step. The diversification of the United States is relatively successful. Air conditioners, refrigerators, washing machines, small appliances go hand in hand, and overseas markets do. Not bad.
Dong Mingzhu repeatedly mentioned that Gree Group has been improving production, reducing costs and increasing efficiency through the Industrial Internet in recent years. She said that “Industrial Internet, first of all, is industry, followed by the Internet. Traditional manufacturing in the industrial Internet Under the lining, it is transforming from a physically intensive enterprise to a brain-intensive enterprise. “It is true that Gree has a very solid foundation in industrial manufacturing, and there are indeed some weak links in the Internet.
Thirdly, in the air-conditioning market, the domestic competition is fierce. In the context of the huge market share of the Gree revenue in the international market, it is imperative to accelerate internationalization.
The domestic market is large, but the overseas market has become the focus of domestic home appliance companies. In the first half of this year, Gree Electric’s revenue of 83.3 billion yuan, overseas income of 13.9 billion yuan, accounting for 16.7%, while the other two major power giants Haier, the United States are more than 40%.
The main difference is that Gree has always insisted on playing its own brand promotion, while the United States and Haier have some mergers and acquisitions overseas. For example, Midea acquired Toshiba’s white power, and Haier acquired GM’s home appliances. Midea and Haier can quickly occupy a certain market share with the original overseas brands, and Gree’s strategy is to insist on playing its own brand, so it takes longer to penetrate the market.
Sorghum + Gree, what kind of chemical reaction will there be?
The success of the bidding is only the beginning. Whether Gaochun Capital can lead Gree Electric to go better and further is the “hard indicator” to test the transaction.
Gaoyu Capital was founded in 2005 to sort out its historical investment, from the earliest Tencent, to assisting Jingdong, Qihe Tencent and Jingdong, to privatization in the past two years and digitally transforming Belle International, which proves its presence in the industry. Ability to upgrade and integrate industries.
In the more than ten years since the establishment of Gaochun, a large number of outstanding companies have been invested in redefining their own industry – Tencent, Jingdong, Meituan Review, Aiqiyi, Didi, Belle International, Baekje Shenzhou, Medicine Ming Kangde and so on, each investment case is called the industry classic.
In 2005, Gaochun Capital’s first investment targeted China, targeting Tencent with a market capitalization of less than $2 billion. At that time, Zhang Lei was interested in China’s potentially large Internet user community. Fourteen years later, Tencent’s market value exceeded $400 billion.
Gree was discovered in the second year of the establishment of Gaochun. At that time, the home appliance market was staged a price war and a technical war, but in the air-conditioning industry, an industry consolidation storm hit. According to media reports, 200In 5 years, Gree’s home air conditioner sales exceeded 10 million units, becoming the “single champion” of household air conditioners. In 2006, Gree Electric achieved a revenue of 23.214 billion yuan in air-conditioning business, surpassing Midea and Haier, ranking first among the three air-conditioning companies. Since then, Gaochun has invested in Gree and has been in heavy positions for more than ten years.
In 2008, due to the global economic crisis, almost no one was willing to invest in capital to create high-end consumer goods. Zhang Lei quickly captured the gap in the market and firmly invested in the development of laundry liquid products by Blue Moon, and continued to invest in the loss stage. Three years later, Blue Moon defeated international giants P&G and Unilever in the high-end laundry liquid market and became the boss of the Chinese laundry liquid industry. Zhang Lei’s judgment was once again verified by the market.
Before Gaochun invested in Jingdong, Gaochun has passed the long-term investigation and research on the retail e-commerce industry to clarify the development model of the next stage of retail e-commerce. With the investment of Gaochun Capital into JD.com, it has also established a bridge to allow Blue Moon executives to engage with JD. To achieve mutual win-win in brand promotion and sales promotion.
Sorghum’s upgrade to the fashion retail group Belle’s full supply chain is also known as the sample in the industry. In 2017, Gao Song became its controlling shareholder after the completion of the privatization of Belle. In the next two years, Gao Song did not personally “end” the operation, but still led the original management, and opened the digital transformation of the enterprise with Belle. Not long ago, the Hong Kong stock market listed in the fight is the practice base of Belle transformation.
Sorghum also has precedents for international cooperation. For example, as a long-term important investor of Tencent, in 2013, Gaochun and Tencent and Indonesian media group Global Mediacom announced that they will jointly establish a joint venture to develop WeChat business in Indonesia. . In 2017, Gaochun Capital introduced Woowa Bros, a well-known O2O platform in Korea, to the US group companies. The two companies quickly found a “common language” and established a good mutual learning mechanism through visits and exchanges.
It is worth mentioning that Gaochun has a rich investment map across technology companies and the real economy, as well as a self-built big data team and full-time strategic operation experts, and accumulated a large number of cases in the industrial Internet enabling entity economy. . There are also successful cases in digital empowerment companies, such as digital upgrades in stores, digital tools for grassroots clerk, and reconstruction of people’s yards. Regarding the chip business that Dong Mingzhu is obsessed with, in reference to the previous practice of Gaochun Capital, it is likely to promote the complementary advantages of the existing scientific research enterprises and Gree Electric’s existing scientific research business.
Only from the three major exams, the deal is worth looking forward to, and the rest is only time to answer.