Acquisition of Delphi Jingxi Heavy Industry Blockbuster

The emerging "project company" dominated by the Beijing Municipal Government demonstrated its acquisition ambitions for all Delphi's businesses.

For the Beijing Jingxi Heavy Industry Co., Ltd. in Doudian Town, Fangshan District, Beijing, the employees were very anxious recently. Everyone was there waiting for a result announcement about their own destiny. They have been waiting for a long time, but it may still require more patience.

On March 30, 2009, Jingxi Heavy Industry signed an agreement with Delphi Corporation, the largest US parts and components company, in Detroit, USA, to acquire Delphi's global R&D and production systems for automotive suspensions and brakes. The acquisition is currently under review in the Southern Court of New York, USA, and it is estimated that the approval will end before November 1 of this year.

If approved, the acquisition will cost US$100 million to acquire Delphi’s eight production plants, five technology centers, and 14 technical support and customer service centers in Poland, the United States, Mexico, China, and France. , and about 3,000 employees who believe in more anxiety.

Delphi used to be the world's largest supplier of automotive parts. It was detached from General Motors in 1999 and is a world leader in automotive electronics, automotive parts and system integration technologies. The product supply includes GM, Ford, Toyota and other large global vehicle manufacturers. In its most glorious period, Delphi had 152 wholly-owned factories in 34 countries around the world. However, since the filing of bankruptcy protection in 2005, Delphi has not stopped divesting or selling its non-core business. In 2005, Delphi tossed the global automotive battery industry to Johnson Controls; in 2007, Trina purchased brake processing and module assembly assets from three plants in Delphi in two locations; in January 2009, Bienes of Mexico announced the acquisition of Delphi. Global exhaust system business.

In the eyes of China's automobile and auto parts companies, Delphi has always been a "sweet potato." After many companies tried to plug in a failure, Jingxi Heavy Industry finally thrown this olive branch. Jingxi Heavy Industry, which was formally listed in March this year, is a new company jointly funded by the Fangshan District Government of Beijing, Shougang Group, and Tianbao Group with a registered capital of 800 million yuan. Among them, Shougang Corporation invested 408 million yuan, accounting for 51% of the total capital; Fangshan State-owned operating company contributed 200 million yuan, accounting for 25% of the total share capital; Tianbao Group's Baoan Investment and Development Corporation invested 192 million yuan, accounting for 24% of the total share capital.

The outside world is puzzled by the fact that BWI has already had enough reason to “bottom-bottom” Delphi since its establishment was less than two months old. According to this publication, Jingxi Heavy Industry is the Beijing municipal government to promote Delphi’s asset acquisition program. Specially established company. Zhao Shiguang, Donghai Securities Automotive Analyst, analyzed “Business Weekly”: “The acquisition was conducted in the context of Beijing’s acceleration of the development of the Beijing auto industry.” The first time the national “Auto Industry Adjustment and Revitalization Plan” was issued. Beijing also formulated relevant measures to accelerate the development of Beijing's auto industry, including five major auto industrial parks including new high-end components, high-end automotive electronics, automotive design and development, special vehicle manufacturing, and parts and components trading. According to the development goals of the Beijing auto industry, the production and sales of Beijing autos in 2012 will reach 1.5 million, which is more than doubled from 2008, and the output value of the auto industry will also increase from RMB 102.4 billion last year to RMB 240 billion.

The parts and components industry has always been a weakness of the Beijing auto industry. FAW, SAIC, Dongfeng, and Guangzhou Automobile all have their own main supply parts and components system, but Beijing lacks powerful parts and components. Mercedes-Benz and Beijing’s modern facilities are basically all in the hands of foreigners. All of Beiqi Foton’s core components are basically not their own. “So, the development of core components and parts integration has become the primary strategic choice for the development of the automotive industry in Beijing.” Zhao Shiguang said, “In the context of the financial crisis, international M&A measures have become more feasible. Only through international mergers and acquisitions can we effectively bridge the gap with its counterparts at home and abroad in the short term.” In fact, BWI’s acquisition of Delphi’s assets has already started, but a large amount of previous work was indirect shareholders of Jingxi Heavy Industry Tianbao Group. The implementation includes the engagement of lawyers, accountants, appraisers, human resources consultants, and investment banking institutions for up to two years of pre-due due diligence and negotiation.

According to the reporter's understanding, the Beijing Municipal Government has prepared 6 billion U.S. dollars in acquisition funds and plans to acquire Delphi's entire business within the next three years. Obviously, Beijing's "ambition" is not just a brake and suspension system for Delphi. It is more likely to be a complete acquisition plan. However, as long as the specific acquisition has not yet passed the approval, there are many variables, especially the direct intervention of the Beijing Municipal Government, so that the commercial acquisition brought a touch of political color.

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