Business Activities News
- SEB given green light to acquire majortity stake in China's Supor
Date: 13-Apr-2007 Sources: (People's Daily)
France's SEB, the world's largest kitchen appliance manufacturer, has finally received approval from the Ministry of Commerce to acquire a majority stake in Zhejiang Supor Cookware, despite vociferous objections from China's cookware firms.
SEB will go ahead with its original acquisition plan for a 52.74 percent to 61 percent stake of Supor to become the controlling shareholder.
Supor Group, the parent company of the Shenzhen-listed firm, the group founder Su Zengfu and his son Su Xianze, will sell 25.32 million shares to SEB at 18 yuan (2.3 U.S. dollars) per share.
The SEB will get a private placement of 40 million A shares from Supor, also at 18 yuan per share, and has the option of purchasing another 48.61 to 66.45 million shares.
The final stake held by Su and his son, and the previous majority shareholder, Supor Group, is yet to be specified.
The ministry ruled that the shares in Supor held by SEB were banned from being traded for three years.
The announcement from the ministry, which is in charge of foreign mergers and acquisitions (M&A), comes a full eight months after the two companies signed the deal in August last year, following strong opposition from competitors.
Other business leaders such as Aishida (ASD) in Zhejiang Province and Double Happiness Cooker Company in Guangdong Province filed objections against the deal to the Ministry of Commerce.
They argued that the acquisition of Supor would result in a monopoly of the sector, leading to the bankruptcy of many domestic enterprises and huge job cuts.
The ministry launched an investigation into the deal in October. Regulations regarding foreign mergers and acquisitions released in August last year said a foreign merger and acquisition could only be classified as a monopoly if the market share reached 20 percent or above.
Supor maintained that its market share was about ten percent, refuting rumors that it would have a 40 percent market share.
'The long term development of the company is more important than who has the controlling stake,' Su Zengfu told Economic Reference.
Previous reports said the sales volume of SEB in Asia would rise to account for 30 percent of its global total, up from 10 percent, if it secured the acquisition of Supor.
The approval from the ministry has caused the share price of Supor to rise to 33.5 yuan per share after going up by the maximum ten percent on Thursday. The share price was 16 yuan in August last year.
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