China’s Ningbo Jifeng Agrees to Buy German Auto Supplier Grammer
(Reuters) – Chinese auto supplier Ningbo Jifeng Auto Parts agreed to buy German rival Grammer just as Chinese takeovers face increased scrutiny from German and European authorities eager to protect domestic know-how.
The companies signed a business combination agreement Tuesday under which Ningbo Jifeng is to offer 61.25 euros ($70.87) per share for Grammer, valuing the group at around 772 million euros, including dividends. Ningbo Jifeng already owns almost 26% of Grammer after raising its stake in October.
Grammer shares jumped 19% to close at 61.20 euros, just below the Ningbo offer price.
The two companies intend to deepen a strategic partnership that started when Ningbo took a stake in Grammer early last year, Grammer said. The combination hopes to optimize its global footprint and secure a global growth strategy, Grammer said.
The proposed transaction will test Germany’s willingness to tolerate Chinese takeovers, following an unsolicited approach by Li Shufu, chairman of Zhejiang Geely Holding Group, to secure a $9 billion stake in Daimler.
European lawmakers are finalizing a proposal for greater scrutiny of investments made with state influence or aimed at transferring key technologies to a third country, a clear reference to Chinese state-sponsored firms that have bought European rivals.
It also comes less than a week after German Chancellor Angela Merkel, during a trip to China, called on the world’s No. 2 economy to open up key industries to outside competition, demanding greater reciprocity with respect to takeovers and market access to technologies.
Sources familiar with the matter said that Ningbo Jifeng is offering to guarantee jobs at Grammer for 7½ years as part of the proposed transaction, which could soften possible opposition to a takeover.
Sources told Reuters around the time Ningbo Jifeng raised its investment in fall that the Chinese company wanted to expand its stake amid a power struggle with a rival shareholder, Bosnia's Hastor family. Grammer management has generally welcomed the attention of Ningbo Jifeng as a potential “white knight” in its conflict with Hastor.
“We would view such a bid as positive as it offers the Hastor group a good opportunity to exit,” DZ Bank analyst Michael Punzet wrote in a note, keeping a “hold” rating on the stock.
Grammer said Tuesday its executive board welcomed and supported the takeover offer.
Ningbo Jifeng's offer is subject to obtaining at least 50% plus one share in Grammer, including the stake it already holds, as well as regulatory approvals.
May 06 06:31 PM
May 06 06:25 PM
May 06 06:16 PM
May 05 06:52 PM
May 05 06:46 PM
May 05 06:43 PM
May 04 06:37 PM
May 04 06:34 PM
May 04 05:50 PM
Apr 30 07:05 PM
Apr 30 06:31 PM
- 1Sinopharm’s Vaccine Nears Emergency-Use Approval by WHO
- 2China Manufacturing Expansion Picks Up Speed, Caixin PMI Shows
- 3China Policy Banks Test New Bond Issuance Program, Spelling Bad News for Middlemen
- 4HNA Units’ $15 Billion in Losses Show the Challenges in Store for Restructuring China’s Profligate Conglomerates
- 5China Hits More Internet Businesses With Antitrust Fines
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas