300 billion market capitalization reinvent GREE's market leader.

300 billion market capitalization reinvent GREE's market leader.

Original Title: 300 billion market value restructuring will reshape the washing machine market leader in the United States, a "Little Swan"

Beijing News (Reporter Chen Weicheng) September 10, more than 40 days after the suspension of the United States Group and Cygnet assets reorganization has finally come to light.

On the evening of Oct. 23, Guangdong-based American Group announced that it planned to issue A shares to absorb and merge Wuxi Little Swan in exchange for shares. The transaction price was $14.383 billion. The swan will terminate its listing and cancel its legal personality after the completion of the swap. The American Group will undertake all the assets, liabilities, business, personnel, contracts and other rights and obligations of the swan. Wuxi Swan thoroughly "South fly".

The group said that after the merger, the merger will effectively integrate global business, provide a more comprehensive and competitive product portfolio globally, and enhance the efficiency and effectiveness of the group's global market expansion.

The price of merger and acquisition is 14 billion 383 million yuan.

On the afternoon of September 9, American Group and its holding subsidiary, Little Swan, also announced that American Group was planning a major asset restructuring and that its shares had been suspended since September 10. Prior to the suspension of the restructuring, the market capitalization of American Group and Little Swan reached 267.65 billion and 29.411 billion respectively, totalling nearly 300 billion yuan.

More than 40 days later, on the evening of Oct. 23, the American Group intends to issue A shares in exchange for the merged Little Swan, i.e. the American Group will issue shares to all the swap shareholders except the American Group and TITONI, in exchange for the A shares held by those shareholders and the B shares held by the Little Swan. Swan A and B shares held by American Group and TITONI will not participate in the swap and will be cancelled after the merger.

The swan will terminate its listing and cancel its legal personality after the completion of the swap. The group or its wholly-owned subsidiary will inherit and undertake all the assets, liabilities, business, personnel, contracts and other rights and obligations of the swan. American Group will apply for listing on the main board of the Shenzhen Stock Exchange to circulate its A shares, denominated at RMB 1 per share, as a result of the exchange and merger.

In the merger, the exchange price of American Group was 42.04 yuan per share on 20 trading days before the benchmark date. After comprehensive consideration, the swap price of Cygnus A shares is based on the average transaction price of 46.28 yuan per share in 20 trading days prior to the benchmark date, and a 10% premium rate, i.e. 50.91 yuan per share, is given on this basis. The swap ratio between American Group and Little Swan A is 1:1.2110, which means that each Little Swan A share can be exchanged for 1.2110 American Group shares.

The swap price of Cygnus B shares is based on the average HK$37.24 per share of the 20 trading days prior to the benchmark date, and a 30 per cent premium rate of HK$48.41 per share is set on this basis. It is equivalent to RMB 42.07 yuan / share. The swap ratio between American Group and Little Swan B is 1:1.0007, which means that each Little Swan B share can be exchanged for 1.0007 American Group shares.

As of today's announcement, the A shares of Little Swan are 441 million and the B shares are 191 million. In addition to the direct and indirect holdings of Little Swan by American Group, the A shares of Little Swan are 203 million and the B shares of Little Swan are 96.83 million. According to the calculation of the share exchange ratio, the total number of shares absorbed by the American Group for the share exchange is 342 million.

In this merger, the transaction price of the assets to be purchased by American Group is 14.383 billion yuan.

Solve the problems of interbank competition and related transactions thoroughly.

Wuxi swan, born in 1958, has developed and produced the first full-automatic washing machine in China. In 1996 and 1997, the Swan issued B-shares and A shares respectively, successfully listing in Shenzhen Stock Exchange.

The intersection of the swan and the beautiful group originated in 2008. At that time, Meiji Electric purchased 24.01% of Little Swan for 1.68 billion yuan and became the actual controller. Little Swan changed from state-owned enterprise to private enterprise. After a series of capital operations, the direct and indirect ownership of Cygnus A and Cygnus B increased to 52.67%.

The washing machine of the United States already has three brands of Beverly, Little Swan, and Mei, together with the Toshiba White Power, which was acquired before, Mei Group and Little Swan have potential problems such as peer competition, affiliated transactions and so on.

"The American group also has washing machine business, so there will be competition between the small swan. American Group also produces washing motors and other parts of the company to the Cygnet supply of related transactions, are not conducive to the United States group listed companies in the internal business processes. Industry analyst Liang Zhenpeng said that the privatization of Cygnus is conducive to the unified allocation of resources within the group.

American Group also believes that the swap and merger of Little Swan can thoroughly solve the potential competition between the two sides, break through the bottleneck of their respective business development, and completely eliminate the related transactions between the two sides of the merger.

Although through the way of swap to absorb and merge Little Swan, so as to achieve business advantage integration, play a synergistic effect. However, the assets and business scope involved in this exchange and merger is wide, involving a wide range of transactions after the merger, the two sides in the assets, strategy, business, personnel, organizational structure and other aspects will be further integrated. American Group said that due to the different management systems and modes of the merger, there may be some integration risks in the process of integration.

The little swan is the fat swan.

In 2018, the swan was founded 60th anniversary, and the United States Group ushered in 50th anniversary Daqing. Today's Little Swan has grown into the third largest washing machine manufacturer in the world. The United States Group has also become a HVAC, consumer electrical appliances, robotics and automation systems, intelligent supply chain (logistics) as the main business of the technology group.

On the evening of October 19, he Hengjian, founder of American Group, mentioned at the 50th Anniversary Strategic Conference of American Group that the future revenue and market value will both reach 500 billion yuan. In 2017, the US group achieved a total revenue of 241 billion 900 million yuan and 143 billion 700 million yuan in the first half of 2018. The US group has a market value of 267 billion 100 million yuan before its suspension.

The Swan incorporation into the US group helps to achieve this goal as soon as possible. In 2008, the operating income of Little Swan was 4.293 billion yuan, realizing a net profit of 40.3383 million yuan. But by 2017, Little Swan had realized a net profit of 1.506 billion yuan and a revenue of 2.385 billion yuan. In the first half of 2018, the small Swan achieved a revenue of 12 billion 57 million yuan and a net profit of 902 million yuan. In addition, Little Swan has less capital expenditure and higher cash flow return, which is known as "cash cow" in the industry.

In addition, the recent U.S. group and the small Swan share price volatility, the small Swan share price fell by nearly half, the U.S. group and the small Swan market value shrink. Industry insiders believe that this period of time, both on the business and assets of a thorough reorganization of capital costs less, is a good opportunity.

CITIC Securities, an independent financial consultant, believes that the swap will continue to operate by the surviving American group. The group business layout of the United States will be further improved, related business scale and sustained profitability will be enhanced. Prior to the merger, the rights and losses enjoyed by all shareholders except Mei Group and TITONI will be transferred to Mei Group's ownership rights and net profits of its parent company, and Mei Group's ownership rights and net profits of its parent company will be further increased.

Achieving internal synergy

The United States, Gree, Qingdao Haier is the white power three giants, Haier in the washing machine field still maintains the leading position. Zhongyikang released figures for the washing machine industry in mid-2018, Haier's share is 33.2%, ranking first in the industry, Cygnus and Siemens were 18.3% and 12.3% respectively, ranking second and third.

Mei Group also believes that under the current trend that smart home systems at home and abroad require a full range of development models, limited by the original single-product business model, Little Swan is difficult to fully demonstrate its product strength, cost, efficiency and other advantages in the future international competition.

Under the background of obvious differentiation of domestic sales market, rising market concentration and strong persistence in the household appliances industry, Meiji Group believes that this is a strategic layout to cope with the intensification of competition and the enhancement of market concentration in the household appliances industry.

The group said the transaction will promote the group to "smart Home + smart manufacturing" transformation, consolidate the group's leading position in the home appliance industry, and enhance corporate value through synergies, while helping to prevent operational risks and optimize the capital structure, to achieve more sustainable and stable development.

After the merger is completed, the two parties will effectively integrate the global business. With the help of Cygnet's foundation in the washing machine industry, the group will achieve internal synergies in brand effect, scale bargaining, user demand mining, global strategic customer network and R&D investment.

Little Swan will benefit from the strategic layout and channel advantages of the United States Group in many fields around the world, integrating into the broad platform for the development of all categories of smart home systems of the United States Group, further enhancing the strength of international development.

Industry insiders believe that the integration of Cygnet into the United States, the group will form a joint effort with its other brands washing machine business, Cygnet with Beverly to the high-end market, with Toshiba to expand the overseas market, while the United States washing machine dominates the low-end, jointly complement the United States group washing machine business.

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