BIZCHINA / Center
French company gets Supor green light
By Diao Ying (China Daily)
Updated: 2007-04-13 08:59
French company SEB has received government approval to acquire leading
Chinese cookware maker Supor after a lengthy industry debate.
Shenzhen-listed Zhejiang Supor Cookware said yesterday French home
appliance maker SEB would take a majority stake of 52 to 61 percent after
the deal was cleared by the Ministry of Commerce. The company must apply
to the China Securities Regulatory Commission for final approval.
SEB said previously the deal was worth around $300 million.
The ministry's decision brings to an end debate led by Supor's rivals,
concerned about the creation of a foreign monopoly in China's kitchenware
industry.
It was one of many recent cases that have raised fears over the impact of
foreign control on domestic industry security and protection of national
brands.
Supor and SEB reached an agreement last August over the strategic
investment. But the case was delayed by industry appeals.
Several domestic firms including ASD Electric Appliance Co Ltd and Double
Happiness Cooker Electric Appliance Co said the acquisition may hurt
China's cookware industry.
"The acquisition will start a cookware price war and damage the
development of the industry," ASD said last year.
The Ministry of Commerce held a hearing on the matter before it granted
approval on Monday after an investigation involving the industry
association and companies.
Debates over foreign acquisitions have been raging across industries from
manufacturing to food and beverages. The most recent is the case
involving China's biggest beverage producer Wahaha. Its chairman Zeng
Qinghou is aggressively opposing an acquisition by French food giant
Danone.
US private equity firm Carlyle has made several concessions in its
acquisition bid for Xugong Group Construction Machinery Co Ltd. Its
proposed stake has been cut from 85 percent to the current 45 percent and
it is still waiting for approval.
Chen Meirong from Supor's rival ASD yesterday refused an interview
request. Double Happiness said it had no comment.
According to Shao Qing, an analyst from Ping'an Securities, Supor will
see its exports surge as the original equipment manufacturer (OEM) for
SEB after the acquisition. Supor posted revenue of 20.7 million yuan in
2006, up 42 percent on the previous year. The domestic market accounted
for close to 70 percent of its business.
Long-established SEB kept a low profile in China before the deal. "China
is a market that we want to be a leader in. To do that, we need a
platform," Vincent Tai, managing director of SEB's subsidiary in Shanghai
was quoted as saying in a previous report.
(For more biz stories, please visit Industry Updates)
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