Lu Guanqiu, a Chinese who once appeared on the cover of "Newsweek" and the "Times Weekly" edition of the US in the early 90s of last century, this time has just announced plans to purchase GM's parts and components giant Delphi Asset Plan. It caused Americans' shock.
On the 19th of this month, Lu Guanqiu, chairman of Wanxiang Group’s Board of Directors, told Automotive News that Wanxiang Group is in the process of negotiating the acquisition of Delphi’s assets in the United States. Previously, Ni Guan, the head of Lu Guanqiu and the head of Wanxiang America, also said that Wanxiang Group is very interested in acquiring Delphi's assets that are in financial crisis.
When the news came out, it was puzzling: Wanxiang had successfully acquired a North American auto parts supplier this year, but there was hardly any rumors about the media. With Lu Guanqiu's low-key and cautious style, how could he have released the wind early when things still “hadn't a word yet?â€
Sun Jian, Kearney’s vice president of global affairs, said that Delphi, a large listed company with a high degree of public concern, could cause a big market reaction. "Before the acquisition, it is possible to reduce unnecessary misunderstandings by clearly communicating to the shareholders and the public the media's intentions and strategic vision through the media."
The next question is: What will Wanxiang use in bidding? How big is it to win?
Lu Guanqiu said: "We had previously had a supply relationship with Delphi. The opportunity is for the prophet to come first." But according to the information currently available, there are many strong players in Europe, America, India, etc. who are interested in bidding for Delphi assets, and Delphi shareholders and Management also has its own considerations when selling assets: one is the acquirer’s strength, and the other is whether the acquirer’s own assets are complementary to those sold by Delphi.
Analyzing the main reasons for Delphi's troubles we can find that the high wage burden is the culprit, followed by equipment aging, pension subsidies and other higher labor costs. In this regard, Wanxiang Group, a company that has grown up in emerging markets, has an advantage comparable to those of European and American competitors. A North American parts company that was acquired by Wanxiang (USA) stated that the reason they sold themselves to Wanxiang instead of any European and American companies is: “There will be qualitative changes in resources complementarity.â€
In addition, Wanxiang is also creating a "people harmony" condition. It is reported that this acquisition will be operated by Wan Xiang (United States) led by Ni Band, which has a history of more than 10 years and successfully completed more than 20 overseas acquisitions and share participation projects. Wanxiang (US)'s consistent acquisition strategy is: In the acquisition process, it is often associated with related companies or investment funds, “Let local companies go ahead, and some problems are better handled by them than we deal with.†This has been summarized.
Even so, I still have cautious optimism for Wanxiang’s bid for Delphi, because the more crucial factor comes from the tricks that opponents may resort to. Many bidding opponents will also test the endurance of Lu Guanqiu.
Of course, if Wanxiang succeeds in the acquisition, besides increasing its OEM business in the North American market, it will also be able to obtain Delphi's more advanced products and technologies to benefit the brand. Withdrawing one thousand steps, even if Wanxiang withdraws from his body, he can use this as an exercise in the international market. After all, with the deepening of industrial transfer, there are still many opportunities for universality.