The hottest Shandong heavy industry chooses the go

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Shandong heavy industry chooses the governance mode according to local conditions after "going out"

Shandong heavy industry chooses the governance mode according to local conditions after "going out"

China Construction machinery information

"enterprises' going out 'is based on strategic needs, and they cannot' go out 'for the sake of' going out ', but should act according to their capabilities." Jiang Kui, general manager of Shandong heavy industry group, said at the recent special training class on the work of the board of directors of provincial enterprises jointly held by the state owned assets supervision and Administration Commission of Shandong Province [Weibo] and the Provincial Social Security Fund Council that he summarized the successful experience of overseas mergers and acquisitions in recent years

"the culture, corporate governance structure and legal environment of foreign enterprises are very different from those of domestic enterprises. For the international layout of domestic enterprises, it is necessary to make full preparations, conduct detailed research and formulate rigorous and feasible implementation plans before mergers and acquisitions, and to choose different governance and management structures according to local conditions at different stages of enterprise development after mergers and acquisitions." Jiang Kui thinks

after the outbreak of the global financial crisis, Chinese enterprises' cross-border mergers and acquisitions of "bottom-up" once stunned the world. However, the aura of many M & A enterprises gradually faded due to the poor or failure of M & A. the "beautiful looking" overseas M & A began to arouse the reflection of Chinese enterprises

many enterprises in Shandong, a large state-owned Province, have also accelerated their overseas layout after the global financial crisis, but as in the national situation, a few are happy and a few are worried

in this context, the exploration of Shandong heavy industry has attracted attention

from 2009 to 2012, Shandong heavy industry Weichai group successively acquired French boduan company, Italian Faraday company, German Kaiao group and Linde hydraulic. At present, these M & A companies and Weichai have achieved resource sharing and coordinated development

"up to now, Weichai holds a total of 37.83 million shares of Kaiao, with a cumulative investment of 1.08 billion euros, dividends of 11.5 million euros, and a holding cost of 28.14 euros per share. Kaiao's current share price is 40.88 euros, the company's book floating profit is about 480 million euros, and the return on shareholders is about 45%." Jiang Kui said

overseas mergers and acquisitions to adjust the structure

Jiang Kui said frankly that compared with Volvo and Cummins, the industry benchmark enterprises in Shandong heavy industry, in the process of structural adjustment, the business structure and market structure of the latter are more balanced and adjusted, and the degree of internationalization is significantly higher. "Shandong heavy industry has adjusted its global layout in recent years, and its business structure is becoming more and more reasonable."

he briefly combed the overseas M & a roadmap of Shandong heavy industry in recent years: in January 2009, the French economy fell into a trough, and Weichai bought boduan company for 2.99 million euros. In January 2012, the Italian economy was struggling, and Weichai acquired Faraday. In September 2012, Germany was trapped in the European debt crisis, and Weichai restructured Kaiao group and Linde hydraulic

referring to the details of the merger and acquisition of Faraday, Jiang Kui said that it took more than two years from the initial contact with due diligence, merger and acquisition declaration, and then to the final delivery after locking the merger and acquisition target, in which the debt restructuring and equity restructuring are very complex. After the completion of the acquisition in 2012, Weichai group held 75% of the equity of Faraday, in an absolute holding position. In 2014, the Mongolian side thanked the Chinese side for its support and help in Faraday's new business plan to turn losses into profits. Weichai group increased its capital by 80million euros, and its equity ratio increased to 86.82%, further consolidating its control

the process of acquiring Kaiao is more complicated. Linde hydraulic under Kaiao is watched by many enterprises because of its leading technology. Eaton group has cooperated with Linde hydraulic for more than ten years and has the preemptive right to it, which is the biggest obstacle for Weichai to acquire Kaiao. Finally, through efforts, Weichai persuaded Eaton to give up the first purchase right, and the merger and acquisition was smoothly promoted

after the acquisition of Kaiao, Weichai first increased its shareholding in Kaiao to 30%. After Kaiao was listed in Frankfurt, Weichai increased its shareholding in Kaiao to 33.3% on August 16, 2014. In April this year, Weichai further increased its shareholding in Kaiao to 38.25%, becoming its largest shareholder

corporate governance is very different

compared with the difficulty of the M & a process, how to manage overseas companies after the M & A is completed and make them enter the track of healthy development is a more arduous challenge

Jiang Kui frankly said that although they are in Europe, the governance structures of Kaiao group in Germany and Faraday group in Italy are very different, mainly manifested in different cultures; The development background of the enterprise is different. Faraday has always been a family business, while Kaiao has experienced the rotation of industrial and financial shareholders, and the public level is stronger; The equity of Weichai in the two companies is different. Faraday is the absolute holding of Weichai and has control over the decision-making body, while for Kaiao, Weichai is the single largest shareholder and is in a relative control position

he explained the corporate governance structure of Kaiao in detail, and compared it with that of Weichai, which has many differences. For example, Kaiao's board of supervisors and executive management have a clear division of labor and do not coincide, while the executive director of Weichai holds concurrent positions in the board of directors and management

for another example, the supervisors of the supervisory board of German enterprises, whether from shareholders or trade unions, make independent judgments and decisions in their own names, and assume the law personally, rather than performing their duties on behalf of shareholders, which is very different from Listed Companies in China

in terms of the rights and obligations of the management, domestic listed companies generally have no rules, and they do not need to report to the board of supervisors according to their business conditions and needs; The executive management of Kaiao holds a meeting every 14 days, and the CEO must regularly report the company's operations to the chairman of the board of supervisors

the rights of the board of supervisors are also different. The board of supervisors of domestic enterprises has only the right to supervise the board of directors, without the right to appoint or remove; Kaiao's board of supervisors has the right to supervise, appoint and remove the executive management

the structure and responsibilities of Faraday's board of shareholders, board of supervisors and board of directors are similar to those of Chinese companies, but the specific operation is different. For example, the Secretary of the board of directors of Faraday company is not a statutory permanent position, but is appointed by the chairman of the board of directors before the meeting as required. The company cannot adopt the similar domestic fax method to convene the board of directors

there is no best model

"there is no only best model for corporate governance, and human factors are fundamental." Summarizing the management experience of overseas companies, Jiang Kui believes that the key is to adjust measures to local conditions and manage according to law

he said that the ownership structure is the basis of corporate governance. The company's equity structure manual hydraulic universal material testing machine mainly adopts a simple high-pressure oil source as the power source, which determines the distribution of the company's control right and the coordination mechanism between the company's owners. When structuring the corporate governance structure, the acquirer needs to pay attention to the following factors:

first, the local legal and regulatory environment. 2. Put the experimental gravel and steel balls into the cylinder to understand the rights and obligations under different corporate governance and different corporate forms, such as whether it is necessary to set up a board of supervisors, introduce Labor Union forces, and the different requirements of partnership, limited and joint-stock companies on the governance structure, etc; The second is the management ability of the acquirer, including the management talents, inclusive culture and management demands of the acquirer

acquirers need to scientifically evaluate the above factors, and then implement mergers and acquisitions and equity structures suitable for their own capabilities. For example, if the acquirer feels that the decentralized equity structure may touch too many stakeholders, the larger the company requires the more governance structure, which it cannot control by itself, it can choose to wholly control the small company. If the acquirer feels that the obligation of foreign listing is too cumbersome, it should not seek listing and do not decentralize the equity structure before the conditions are met

in addition, enterprises face different contradictions at different stages of development, so it is not necessary to always maintain a governance and management structure

"for example, when the company is small and depends on China, our main focus is decision-making efficiency, so the governance structure should try to focus on the simple frame tensile test (stress-strain test) led by shareholders Generally, both ends of the material sample are clamped on two clamps with a certain distance between them. If we have a low degree of trust in the management, we can check and balance through the rules of procedure, the introduction of external supervisors and other methods, and give them relatively small rights. If we run in well with the management and have a high degree of trust, we can appropriately delegate power to the management. " Jiang Kui gives an example

it is worth mentioning that in practice, Weichai appoints senior executives of important overseas subsidiaries as directors (or supervisors) of the parent company to bear decision-making risks. For example, the CEO of Kaiao, as a director of Weichai Power (29.66, -0.87, -2.85%), is responsible for the decisions made by the board of directors of Weichai, which is also conducive to communication between both parties

Weichai also organized overseas enterprise trade unions to visit Weichai to strengthen the exchange and integration of grass-roots culture

Jiang Kui said that under a reasonable corporate governance structure, Shandong heavy industry's cross-border M & A enterprises are currently operating well, and have achieved resource sharing and collaborative development with Shandong heavy industry

for example, by making full use of Weichai resources, Faraday established Faraday Asia Pacific Company in Hong Kong and product sales exhibition/experience centers in Qingdao, Shanghai, Sanya and Singapore. In 2013, the Asia Pacific sales orders reached 40million euros, becoming the first in the Asia Pacific market. Before that, the company's Asia Pacific orders were far behind its rivals, only 10million euros

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