China's recent international M&A took place in Africa. At the beginning of September, due to the opposition of the Libyan government, China Petroleum (60 1857) had to give up the acquisition of Canadian Verenex Energy Company, which mainly operated in Libya, for 460 million US dollars.
However, this is only the tip of the iceberg of China's overseas M&A failure. In fact, since TCL Communication announced the acquisition of Alcatel mobile phones on April 26th, 2004, a large number of overseas M&A cases of large enterprises in China have emerged.
Whether there is uncontrollable inflation in Chinese enterprises or many entrepreneurs are bent on proving the strength of Chinese enterprises in the world, the fact presented to Chinese enterprises is that the road to internationalization is not smooth, just like a child who has just grown up, his parents allow him to go further, but when he walks into the forest alone, he finds that the forest is not as interesting as expected.
On the way out, whether it is "Chinalco and Rio Tinto failed in their acquisition", "SAIC lost Ssangyong for $500 million" or "CNOOC's acquisition of Unocal for $654.38+0.3 billion was rejected", these classic cases are telling China enterprises that the outside world is not only wonderful, but also hypocritical interests, unreasonable breach of contract and insurmountable and looming national interests. At the same time, these failed cases also reflect that China enterprises who want to be bigger and stronger need to abandon the theory of capital pride of "talking about money" before the acquisition, on the other hand, they need to be cautious about the integration of management culture after the acquisition. On the road of international mergers and acquisitions, sometimes it is a business, and sometimes it is a transaction, depending on who has the ability and chips to better control the situation.
"Money is not everything"
Energy seems to be the most important field of overseas M&A in China in recent years. In this field, the heroic actions of China enterprises have surprised the world, and the big spenders are all central enterprises.
Success and failure, flowers and tears are concentrated in this scene.
In 2009, Sinopec successfully acquired overseas shares of Addax Company in the UK; PetroChina invested heavily in purchasing Australian LNG; It is reported that CNOOC and China Petroleum intend to jointly bid for YPF, a subsidiary of Spanish oil company in Argentina. A series of facts show that in the year of global financial crisis, 2009 has become the year of overseas acquisition of China Oil Company.
There have been more successful cases in the past. June 65438+February 65438+February 2007, the consortium led by China State Grid won the operation right of Philippine power grid for the next 25 years for about 29.6 billion yuan. In 2007, China Mobile successfully acquired the shares of Pakistani company Ba Cautel held by Mirekam. In May 2007, CIC spent about $3 billion to acquire nearly 65,438+00% shares of Blackstone at a price of $29.605 per share.
However, at the recent Davos Summer Forum in Dalian, the State Council sasac director Li Rongrong threw cold water on this, saying that state-owned enterprises should be cautious about overseas mergers and acquisitions to avoid making mistakes in the future strategic acquisitions.
In the first half of this year, about 65,438+050 state-owned enterprises sought M&A opportunities at home and abroad, but Li Rongrong suggested that these enterprises should be cautious in the future, because the ultimate goal of any overseas M&A is to improve the competitiveness of the company. Li Rongrong also said that if this goal cannot be achieved, any merger would be inappropriate.
In recent years, the actions of energy enterprises in China are dazzling, but the obstacles encountered are obviously increasing, the most important of which is the concern of local governments on the grounds of national security.
For example, in early September, when acquiring Verenex Energy Company of Canada, which owns Libyan oil fields, the company said in its reply to PetroChina that they were under great pressure and had to consider selling the company to a local investment fund in Libya at a discount according to the wishes of the Libyan government.
"The biggest mistake of PetroChina and Sinopec may be that the target is exposed too early and the way is too straightforward. When PetroChina said it would buy oil assets in Libya and Angola, it suddenly took out the purchase price. What others see is not that you are very powerful, but that you feel pressure and threats. " Experts published in a domestic media think so.
The expert also expressed the view that China's energy giants are very powerful, but "money is not everything."
Confrontation between capital temptation and national security pressure
Although the recent acquisition of overseas oilfield resources by PetroChina and Sinopec has been blocked from time to time, after all, China's energy giants often succeed in acquisition, and Chinalco's cooperative acquisition of part of Rio Tinto's equity almost ended in regret.
"Everyone wins except Chinalco" and "Goodbye in Beijing, hello BHP Billiton!" On June 6 this year, Australian newspapers reported that Rio Tinto suspended its cooperation with Chinalco. These two headlines represent the position of most Australian media, who welcome Rio Tinto's decision.
Chinalco has been fooled, which is an embarrassing thing for Chinese people. It is estimated that if we summarize the internationalization of China enterprises many years later, we will take Chinalco as an example, but it actually reflects a sense of crisis of China enterprises in overseas mergers and acquisitions. On the surface, this incident seems to be due to the opposition of Rio Tinto shareholders, but in fact it ended in failure because of the intervention of the Australian government.
In this regard, Xia Bin, director of the Financial Research Institute of the State Council Development Research Center, has expressed his views. He believes that how to improve the art and strategy of M&A for China enterprises still needs our brains. People always think that you are a state-owned enterprise, which is controlled by the state. So can state-owned enterprises and private enterprises go out together, or even private enterprises go out, and the government gives M&A loan support? For example, we set up a stock fund PE in Hong Kong and go out to buy it, which is a relatively better form to block financial protectionism and investment protectionism.
Conflicts between Chinese and foreign management cultures
Although overseas mergers and acquisitions in the fields of IT communication and automobile are not as thrilling as those in energy and heavy industry, and they have all been internationalized, the outcome after the acquisition is also thought-provoking.
On April 26th, 2004, TCL Communication announced that it had signed a memorandum of understanding with Alcatel, and the two parties would set up a company to engage in the research, development and production of mobile phones and related products and services. After the news came out, it caused quite a stir-this is the first time that a China enterprise has acquired part of the business of a well-known overseas brand.
However, within a year, TCL was plagued by a series of problems such as layoffs and financial crisis. As a result, TCL Communication and even TCL Group suffered huge losses in 2006, and Li Dongsheng constantly announced that it would reconsider.
Worse than the acquisition of Alcatel, SAIC acquired South Korea's Ssangyong Motor.
10 On June 28th, SAIC acquired a 48.92% stake in South Korea's Ssangyong for $500 million. SAIC thus consolidated its position as one of the top 500 companies in the world. This is the first time that a domestic automobile enterprise has merged with a leading foreign automobile enterprise as a controlling party. The largest overseas M&A event in the automobile industry is regarded as a landmark event in the transnational operation of the automobile industry in China.
However, on February 6, 2009, the Korean court announced that Ssangyong Motor entered the bankruptcy reorganization procedure. This means that SAIC, the major shareholder of Ssangyong, has lost control of Ssangyong forever.
In the five years since the acquisition of Ssangyong, SAIC has accumulated a total of 4.2 billion yuan, with a loss of more than half.
In fact, an important reason for TCL's overseas failure may be that it neglected to understand and grasp the overseas market. This kind of thing happened again and again and became a "failure" in SAIC.
Originally, Ssangyong was not a strong brand worthy of SAIC's expectation, and SAIC overestimated the income after the acquisition; On the other hand, the difficulty of post-acquisition integration is underestimated. In fact, SAIC bought a production line of Ssangyong as early as 2002, but two years later, it still didn't see the true value of Ssangyong, which makes it difficult to use insufficient preparation as a reason for failure.
China enterprises lack the experience of M&A integration or successful experience, and do not understand the culture, foreign business environment and legal system of M&A enterprises. It is a common problem that the scale and complexity of M&A objects are beyond their control ability. This led to inaction or confusion after the merger, and finally ended in a bleak situation that the merged enterprise could not get out of the predicament, and even the performance of the acquirer itself was greatly dragged down.
In fact, from another perspective, although the internationalization of China enterprises is not smooth, it has also become a good way for China enterprises to mature rapidly. Similarly, Rover SAIC Motor Group, which has a history of 100 years, closed down on April 8, 2005 due to its debt of 654.38+04 billion. SAIC reached a cooperation intention with SAIC in June 2004, but after fully considering the debt risk, SAIC terminated the joint venture in April 2005. This is obviously a wise move.
Internationalization is the historical process of enterprise development in China for so many years, and it is also a page that we can't cross when we look back on history one day. Now in China, it can only be regarded as the initial stage of enterprise internationalization, and failures and missteps occur from time to time. The progress is that the relevant government departments are now examining and thinking about the internationalization of domestic enterprises.
Zhao Linghuan, president of Hony Capital, made a very reasonable remark at the Davos Forum the other day. At that time, he said: "First, the motivation for mergers and acquisitions should be simple, and we should not go to mergers and acquisitions just because of greed or money in our hands. Second, be fully prepared and don't exceed your integration ability. "
Xiong Weiping, general manager of China Aluminum (60 1600), also lamented: "China enterprises lack international management team and experience accumulation. These problems can only be solved in practice, which requires a process and cannot be achieved overnight. "