The reunification ended and the east wind could hardly be said to be “safe and secure”


Following SAIC's acquisition of Nanchang Automobile and Changan's reorganization of Hafeichang River, on May 16th, the long-lasting "Eastern Wind (Fu)" (Steam) Love finally came to an end.

This is yet another reorganization of the four major automobile groups in China. According to the strategic framework agreement signed on that day, Dongfeng Motor Corporation will acquire part of the shares of Fuqi Group held by the Fujian Provincial State-owned Assets Supervision and Administration Commission in a capital increase manner to achieve cooperation at the Fuqi Group level. At the same time, Dongfeng Motor Corporation and Fuqi Group held the Southeast (Fujian) Automobile Industry Co., Ltd. in the form of an investment company.

According to sources, Dongfeng Motor’s holding of Fuqi Group will take a gradual form. The first step is to acquire 45% equity of Fuqi, which will be held by the joint venture company in the southeast; the second step is to sell 300,000 units of Fuqi Group in the year. At the time, mastered more than 60% of the shares in Fuqi Group. However, the source did not disclose the amount of cash Dongfeng Motor needed to pay.

For this integration, some analysts believe that due to Dongfeng Motor's participation in the group level, Dongfeng will be able to theoretically realize the overall integration of Southeast China Automobile, New Longma, Fujian Daimler and Other projects, which will allow integration. The prospects look forward to. However, due to the complex ownership structure of Fuyue's companies, the introduction of products, market-oriented decision lags behind, so the difficulty of the next integration will be obvious.

Integrate the first step: test water southeast

Dongfeng Motor's reorganization of the blessings of the automobile is the same as when Beiqi wanted to restructure the blessing. As early as in June 2011, the industry reported that Dongfeng had been in contact with Fuqi, but the reorganization results have been difficult to produce.

In August last year, the new Longmax automobile under Fuzhou Group suddenly obtained a scarcity of auto production qualification approval after eight years of reorganization, and approved its production of mini-buses and engine projects across product categories. According to rumors, the approval of the production qualification comes from the help of Dongfeng, and it is also an important condition for the Fujian government to “permit” Dongfeng to restructure the blessing. Since then, the negotiation process between Dongfeng and Fujian Province has begun to speed up.

It is reported that, according to Dongfeng’s original wishes, Dongfeng will completely reorganize Fuqi, and the stake in Fuzhou should exceed 50%. However, the Fujian Provincial Government is not willing to lose control of Fuqi, and hopes that the equity of Fuqi can be maintained at around 60%.

Therefore, after the number of games, Dongfeng and Fuqi adopted a progressive stock holding scheme. Dongfeng can hold 45% of the shares in the first phase, and only lock in the southeast automobile. If the annual sales volume (including the engine) of Southeast Automotive in 2015 will reach 300,000 units driven by Dongfeng Motor, Dongfeng may increase its holding to more than 60%, and it may expand its integration target to all companies within the Fuqi Group.

Obviously, under this kind of game, whether Dongfeng reforms the southeastern car's success or not will determine whether this reorganization has the possibility of upgrading.

It is reported that in order to achieve this condition of increase, Dongfeng Motor will establish an investment company with Fuqi Group, and the investment company will hold a 50% stake in Southeast (Fujian) Automobile Industry Co., Ltd. Dongfeng Motor will invest in part of the shares or capital increase of South East Automobile, which is held by Fuzhou Automotive Group, which accounts for 2-3% of the investment company. Fuqi Group will account for 1/3 of the shares. Through this series of steps, Dongfeng Motor will become the actual leader of Southeast Motor.

"After the reorganization, Fufang was still the chairman of the board. The position of the general manager was made by Dongfeng Motor. After the reorganization, about 30 Dongfeng personnel were employed in Southeast Automotive Management positions." Informed sources said.

It is reported that after the signing of the Strategic Framework Agreement, Dongfeng Motor will also perform due diligence on Fuqi Group and its affiliated companies. Due diligence, audit and property assessment plans will be completed in July this year. "We will strive to sign the equity transfer agreement by the end of September 2013. Capital increase agreement, said Liu Weidong, deputy general manager of Dongfeng Motor Corporation.

“Today is the day when Dongfeng and Fujian Autos are married, and it is also an important time node. 2015 will be another important time node. Both parties will be 'born' first child. The future will be in 2017 and 2020. There is continuous cooperation.” Su Lin, governor of Fujian Province, said at the signing ceremony.

Not easy

It is worth noting that behind the reorganization of Dongfeng and Fuqi, the manifestation of the will of the government is also quite obvious, which also makes this restructuring cast a strong administrative color. It is reported that when Dongfeng initiated the restructuring of Fuqi, the object of its direct negotiations was the relevant departments of the Fujian Provincial Government.

According to statistics, the Ministry of Industry and Information Technology issued guidance earlier this year and proposed that the merger and reorganization target of the auto industry is: “In 2015, the industry concentration of the top 10 vehicle manufacturers will reach 90%, forming 3-5 large-scale cars with core competitiveness. "Enterprise groups", "encourage large-scale backbone enterprises to carry out cross-regional, cross-ownership mergers and acquisitions, promote the merger and reorganization of vehicle companies, and through mergers and acquisitions to promote the development of independent brand cars."

In this regard, a source familiar with the Fuqi Group said that this government-led restructuring will have a multi-party game with stakeholders from companies, shareholders to the government. Since only the framework agreement is signed, due diligence and other tasks will be carried out afterwards, there are still some variables in the future.

“In addition, if Dongfeng reorganizes Fuqi, the related joint venture will face more complicated equity relationships, so the reorganization plan also needs to obtain opinions from joint venture partners such as Mitsubishi, Taiwan Zhonghua and Daimler,” the source said.

It is understood that the current vehicle business of Fuqi Group mainly includes Southeast Automotive, Fujian Benz, Fujian New Longma and Xiamen Golden Dragon Auto, etc. The internal equity relationship is very complicated.

Take Southeast Automotive as an example, its equity structure is the dispersed equity of Fuka, Mitsubishi, and China. The interests are difficult to coordinate. Under this situation, for Dongfeng Motor, it will reorganize its existing production and sales system in order to integrate its own resources and organically integrate Southeast Automotive into its “autonomy” development strategy. , has become a major difficulty in the integration process.

It is reported that at the signing site on the 16th, Liu Weidong, deputy general manager of Dongfeng Motor Company, communicated with the media and repeatedly stressed that it is a "strategic alliance" with Fuqi, not a "restructuring merger." This move is considered to be behind the administrative forces and the Dongfeng's appeasement with Fuqi.

As for the strategic significance of this restructuring to Dongfeng, Dongfeng Motor Company stated that: Fuqi's own-brand automobile will bring a business segment of its own brand to Dongfeng, which will accelerate the Dongfeng “autonomy” strategy and achieve Dongfeng’s independence. The “Daily” D300 medium-term business plan target will play an important role; Through strategic cooperation with the Fujian Provincial People’s Government, Dongfeng Motor Company can quickly realize the strategic layout in the southeastern coastal areas, further consolidate and enhance its leading position in the domestic automotive industry. As well as its influence, at the same time, it can also use the geographical advantages of Fujian to “go to the sea” to accelerate the pace of “going out”.



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