LED industry enters the stage of deep integration and the driving force behind mergers and acquisitions

On March 27, Dongshan Precision disclosed the plan for the purchase of major assets. The company intends to acquire its related PCB manufacturing business in cash by the NAS listed company FLEX. The specific targets are Zhuhai Chaoyi Electronics, Zhuhai Chaoyi Technology, Zhuhai. Chaoyi Industrial has a total of 100% equity of 11 companies, and the underlying transaction consideration is US$292.5 million.

The announcement shows that the target company is mainly engaged in the design, production and sales of PCB products. The products are mainly used in communications equipment, enterprise-class servers, consumer electronics, automotive and other industries. The main customers include many internationally renowned companies with good customer resources.

I believe everyone has noticed that in the past 2017, large-scale investment in the mid-stream of the LED industry chain, expansion and mergers and acquisitions, making the industry more concentrated.

Nowadays, the LED industry has entered a stage of deep integration. How will LED companies in a special period in 2018 seize new development opportunities in special times and gain important thrust for further development? This is an important issue that many LED companies urgently need to solve.

In this regard, Dr. Zhang Xiaofei, Chairman of Gaogong LED pointed out that the price war can no longer be the main means of competition, and enterprises need to start from various aspects to enhance their own soft power.

And how to improve soft power? Dr. Zhang Xiaofei pointed out that companies can start from the aspects of capital and brand building. Among them, in terms of capital operation, enterprises can purchase and acquire high-quality resources through capital means.

Sure enough, since entering 2018, LED companies have begun to announce the merger and acquisition news.

Dehao Runda

Dehao Runda disclosed the latest developments on the evening of March 25. The target company is the manufacturing business and related enterprises in China controlled by NVC Lighting, which is expected to be between RMB 3 billion and RMB 500 million. It is worth noting that this disclosure is a revised restructuring target, from the distribution industry of equity acquisition LED lighting products to manufacturing companies.

According to the announcement, the target assets acquired in this transaction are the manufacturing business and related enterprises of NVC Lighting in China, including but not limited to the entire equity of Huizhou NVC Optoelectronics Technology Co., Ltd. The transaction is planned to be carried out in several steps. Party B Wang Donglei, or a designated third party, first acquires part of the equity of the target company, and then Dehao Runda issues shares to Wang Donglei or a designated third party to issue shares, and simultaneously sells cash to NVC. The form of the purchase of the remaining equity of the target company.

NVC Lighting

On March 19, NVC Lighting announced that it had signed an agreement with Hong Kong Luoman International to acquire a 40% stake in Hong Kong Weilan Core Light Trading Co., Ltd. held by the latter. The transaction price is 315 million yuan. As of December 31, 2017, Astraco's profit before taxation was 157 million yuan.

NVC Lighting said that in the past two years, due to rising raw materials, components and labor costs, the profit margin of lighting companies has been compressed. The company has developed a strategy for transforming manufacturing companies into channel companies. The acquisition of the target company will help strengthen the company's sales and distribution channels and the ability to cooperate with it.

Osram

In mid-March, OSRAM acquired BAG Electronics, a subsidiary of the Trilux Group, to strengthen its leading position in the field of electronic components. At the same time, the two parties reached an agreement and signed a strategic five-year supply contract with minimum sales regulations. The contract stipulates that Osram will supply Trilux with the components used in the luminaire.

“This acquisition complements OSRAM's portfolio of state-of-the-art electronic ballasts and is in line with our vision of transforming high-tech companies,” said Wilhelm Nehring, Global CEO, OSRAM Digital Lighting Systems.

Wanrun Technology

On March 14, Wanrun Technology announced that it intends to acquire 51.0248% equity of Guangdong Zhongzhu Tianyou Aesthetics Lighting Co., Ltd. and 51% equity of Nanjing Langhui Optoelectronics Technology Co., Ltd.

Wanrun Technology said that through this acquisition, the company's market competitiveness in LED lighting can be further enhanced, which will help improve the company's position in the lighting market segment, promote the upstream and downstream synergies of LED business, and enhance the company's LED business segment. Comprehensive strength.

Ke Rui

On the evening of March 6, Cree announced the acquisition of Infineon's RF power business for approximately 345 million euros (approximately US$ 428 million), which will expand the wireless market opportunities for the Cree wolfspeed business unit. Infineon will continue to drive key areas of growth such as electric, autonomous, renewable energy and technology to create a connected world.

Huacan Optoelectronics

On the evening of January 24, the official website of the China Securities Regulatory Commission disclosed that Huacan Optoelectronics (300323) acquired Harmony Optoelectronics, which indirectly held the MEMSIC transaction.

Huacan Optoelectronics said that after the completion of the transaction, the company will be able to enter the field of MEMS sensors. As a sub-sector in the semiconductor industry chain, the field has application prospects in aerospace, aerospace, automotive and other industries. The company will further expand the IC industry-related business by arranging the consumer electronics market and industrial application fields. Achieve diversified and extended development.

Dehao Runda

On January 11, Dehao Runda issued a statement saying that it intends to acquire a 13.7% stake in Sanken Semiconductor held by Qi Huachen in cash, and the price of the equity acquisition is 300 million yuan.

Dehao Runda said that Sanken Semiconductor is the main body of the LED flip chip project for the company's fundraising project, and this project will play an important role in the future development of the company. The company's purchase of its 13.7% stake will further enhance the company. The control of Sanken Semiconductor is more conducive to the business development of LED flip chip projects, in line with the company's long-term development strategy.

Linsen

On the morning of January 8, Mulinsen issued a notice saying that the company received a notice from the China Securities Regulatory Commission on January 4, 2018, and the company issued shares and paid cash to purchase assets and related transactions.

The matter is for Mulinsen to purchase a 100% equity interest in Mingxin Optoelectronics held by Harmony Mingxin and Zhuo Rui Investment through the issue of shares and payment of cash. Upon completion of the transaction, Mulinsen will hold a 100% stake in Mingxin Optoelectronics, and Mingxin Optoelectronics will become a wholly-owned subsidiary of Mulinsen.

All in all, the LED industry has entered a period of deep integration, in which vertical integration is obvious, and leading enterprises continue to penetrate substantially vertically and downstream. The output value and supply chain management have also reached the necessary stage of self-construction. The price war is no longer the main means, and the gross profit margin can no longer be lowered. Of course, there is no need to fall. Therefore, capital operation has become the main means of management and has become the driving force behind industrial integration.


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