Inventory|Top 10 mergers in the first half of 2018: What kind of target is "golden"?

In the first half of 2018, mergers and acquisitions were still a big "point of view" in the LED industry. Through mergers and acquisitions, some enterprises will extend their business upstream and downstream to form a better industrial chain synergy effect and enhance profitability; while some enterprises extend to other fields to achieve diversified business development and increase new profit growth points.

By sorting out the acquisitions that occurred in the first half of this year, Gaogong LED found that listed companies are becoming more targeted and more rational about the acquisition targets. Whether it is international manufacturers such as Osram, LG, Cree, etc., or domestic listed companies such as NVC Lighting, Dehao Runda, Wanrun Technology, etc., they prefer more resources to the existing business, and then Achieve coordinated development.

Gaogong LED has compiled ten typical M&A cases in the first half of 2018, and glimpsed their development track through the acquisitions of these companies. (The following rankings are in no particular order)

01 Guanghao Shares plans to acquire Junmei Medical Holdings

On the evening of June 27, Guanghao Co., Ltd. announced that the company's wholly-owned subsidiary, Xiamen Hahaide Enterprise Management Co., Ltd. planned to acquire 39.78 million yuan to acquire Chongqing Junmei Medical Beauty Hospital Co., Ltd. (hereinafter referred to as “Junmei Hospital”) 51%. Equity, to cut into the medical beauty industry.

Comments: In the case of increased pressure in the LED industry, many LED companies have adopted a diversified development strategy, and actively expand to other industries on the basis of giving full play to the advantages of LED main business. Since its listing, Guanghao has formulated a long-term development strategy of “big health + big consumption”, using its special LED lighting products to penetrate the medical beauty industry, and actively creating high-end brands for medical beauty and increasing profit growth.

02 Magna International acquires automotive LED company OlSA

It is reported that Magna International, one of the world's largest auto parts manufacturers, has announced that it has signed an acquisition agreement with Italian automotive lighting manufacturer OLSA SpA. Magna offers automotive body exteriors and structural, power and vision technologies, as well as seating systems and complete vehicle solutions. The transaction amount is 230 million euros.

Comments: The acquisition of OSLA will expand Magna's lighting capabilities, and OSLA's advanced technology will give the company the ability to design and manufacture headlamps, taillights and other lighting products in key regions of the world.

03 Overclocking three acquires the remaining 49% equity of Gala Energy

Overclocking three disclosed the reorganization draft on the evening of May 20, the company issued shares to buy 49% equity of Suntec Energy at 19.90 yuan / share, the transaction price of 172 million yuan. Upon completion of the transaction, the company will hold 100% equity interest in the company.

Comments: Trent Energy has the comprehensive service capability of urban public lighting project design and management. It has completed the public lighting renovation of more than ten cities in Zhejiang and the lighting renovation projects of many commercial centers and large and medium-sized enterprises. Overclocking 3 will further expand its business to the LED downstream application by acquiring the company's energy, and at the same time, it will also bring a large number of high-quality channels and customer resources for its LED cooling components business.

04LG Electronics acquires Austrian automotive lighting company ZKW

According to foreign media reports, LG Electronics' board of directors recently approved the acquisition of the agreement of the leading automotive lighting and headlight system supplier ZKW Group; the transaction value of more than 1.1 billion euros, is LG's largest transaction to date. Under the terms of the deal, LG Electronics will acquire a 70% stake in the ZKW Group and the parent company LG will acquire the remaining 30%.

Through this transaction, LG Electronics will continue to strengthen its position as a leading auto parts company, and plans to expand its automotive lighting business from taillights to related automotive lighting products such as headlights.

Comments: This transaction has brought new growth opportunities for LG auto parts business. In addition to strengthening ZKW's product development capabilities, LG's global production experience and international business network will bring unlimited opportunities for the two companies in the future automotive market, including intelligent lighting solutions.

05 OSRAM acquires two lighting companies

Recently, OSRAM strengthened its business portfolio of semiconductor lighting and laser technology through a wholly-owned acquisition of Vixar. At the same time, the Specialty Lighting Division has been expanding the scope of plant lighting business. In order to strengthen the division, OSRAM recently acquired Fluence Bioengineering, a US specialty lighting company, which has taken a new step in the field of intelligent plant cultivation solutions.

Comments: Vixar products can be used for mobile device identification, as well as for medical, industrial and automotive applications for gesture recognition and distance measurement. This acquisition will provide OSRAM with security including ultra-compact 3D facial recognition technology. Technology; the acquisition of Fluence will expand OSRAM's plant lighting portfolio.

06 NVC lighting heavy gold to win the blue core light

NVC Lighting announced that it has entered into a sale and purchase agreement with Luoman International. The company acquired the remaining 60% equity interest in the company from Luoman International at a consideration of RMB 500 million. On the same day, Zhuhai NVC, a wholly-owned subsidiary of NVC, entered into a sale and purchase agreement with Zhang Peng. Zhuhai NVC acquired a 5% stake in Wuhu NVC from NVC Lighting President Zhang Peng at a consideration of RMB 45 million.

Comments: In the past two years, as some metal raw materials, components and labor costs continue to rise, the profit margin of lighting products manufacturing companies has been compressed. In 2018, NVC Lighting officially formulated a development strategy from manufacturing companies to channel-based enterprises. Moreover, NVC Lighting intends to sell the core assets of the NVC brand in China to DHL Runda, which will enable the two companies to further work together and NVC Lighting is more focused on the channel business.

07 Wanrun Technology plans to hold about 460 million holdings of two "double" enterprises

On March 14, Wanrun Technology announced that it intends to acquire a 51.0248% stake in Zhongzhu Tianyou and a 51% stake in Nanjing Langhui Optoelectronics in cash. The transaction consideration for the 51.0248% equity of Zhongzhu Tianyou is 209,201,680 yuan; the transaction price of 51% equity of Langhui Optoelectronics does not exceed RMB 255 million.

Both companies are excellent domestic lighting engineering design and construction integration companies, all of which have the qualifications for urban and road lighting engineering contractor-level qualification and lighting engineering special design grade A, commonly known as "double armor."

Comments: With the development of the night travel economy and the guidance of national policies, the domestic landscape lighting market has entered the “blowout” period, and lighting projects such as Liard and Mingjiahui have achieved good performance. Through the acquisition of the price reduction “double-a” lighting engineering enterprise, Wanrun Technology further enhances the market competitiveness in LED lighting, especially in municipal engineering and landscape lighting, and at the same time combines the advantages of its own packaging field to promote the synergy effect of LED upstream and downstream.

08Cree acquires Infineon RF business for USD 428 million

US-based Cree announced the acquisition of Infineon Technologies' Radio Frequency Power business for approximately 345 million euros (approximately US$ 428 million). The transaction took effect on March 6.

Comments: Cree and Infineon are the leading technology companies in the industry, each with their own strengths. The acquisition of Infineon's RF power team and technology will expand Wolfspeed's existing products and technologies, such as product design, packaging, manufacturing and customer support services.

09 Dehao Runda plans to acquire NVC's domestic LED lighting manufacturing assets

On the evening of March 25th, Dehao Runda disclosed the progress of the restructuring. The company planned the merger and acquisition of the related company NVC Lighting Control's manufacturing business and related enterprises in China, including but not limited to Huizhou NVC Optoelectronics Technology Co., Ltd. (below Referred to as the “standard enterprise”, the transaction price range is expected to be between RMB 3 billion and RMB 500 million.

Comments: Dehao Runda has a certain scale of general lighting product manufacturing capabilities, but there are still major deficiencies in consumer-oriented brand building. After acquiring NVC Lighting-related manufacturing assets, Dehao Runda will be able to integrate the advantages of NVC brand influence and general lighting product sales channels to achieve synergy.

10 Foxconn or the largest shareholder of Epileds

According to industry sources, Foxconn Group members have allegedly acquired a 7.32% stake in LED epitaxial wafer and chip maker Epileds Technologies from the original shareholder Catcher Technology, and plans to acquire another 20 million new shares of Epileds, or Become the largest shareholder.

Comments: Epileds and Epistar are the only Taiwanese LED companies with RGB technology capabilities, while RGB technology is the key to MicroLED technology. In connection with the previous acquisition of Innolux, AOT and Sharp to acquire the entire equity of eLux, it can be seen that Foxconn wants to use MicroLED to achieve the ambition of overtaking in the display field.

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