Do not use the anti-monopoly blade to kill Xu Fuji's instinct

After Yum announced the acquisition of Little Sheep [6.08-1.14%], Xu Fuji, the largest confectionery brand and sugar spot company in the country, also reported information acquired by foreign investors.

On July 11, Nestle and Xu Fuji also announced that Nestle will acquire a 60% stake in Xu Fuji for 11.1 billion yuan. The outside world speculated that if Nestlé succeeded in acquiring Xu Fuji, it would be one of the largest acquisitions by foreign companies in China, and would disrupt the competitive landscape of the domestic confectionery industry.

The “Corporate” reporter learned from relevant channels that since the successful listing in Singapore in 2007, Xu Fuji has continued to negotiate with many famous companies in the world on cooperation matters. This cooperation is not a sudden decision.

Xu Fuji’s announcement on July 4 stated that the company “has long sought a suitable strategic partner in the confectionery field for cooperation and alliances. Over the years, it has been in contact with potential partners from Japan, Europe and the United States, including the Nestlé Group”. Xu Fuji applied for a temporary suspension of trading on the Singapore Stock Exchange due to "avoiding abnormal fluctuations in stock prices."

Acquisitions still have to cross the antitrust review of the Ministry of Commerce. Yao Jian, spokesman of the Ministry of Commerce, revealed that the Ministry of Commerce had received the application for the materials related to the acquisition on July 14 and was reviewing its integrity.

What is the reason behind Nestle's abacus? Does Xu Fuji have to give 60% of his stock to Nestle? According to relevant media reports, Xu Fuji's "selling himself" act was helpless. In the domestic market, Xu Fuji's internal management loopholes have also been rummaged in addition to the tough competition between White Rabbit and Jacques. Therefore, for this acquisition, Xu Fuji employees can not hide their excitement.

Professor Jiang Zezhong of the Capital University of Economics and Trade told a reporter of “Corporate” that consumers need a branded and standardized business from the consumer’s point of view. In the process of market competition, relatively unregulated enterprise exit is a normal phenomenon.

Professor Jiang Zezhong stated that family-oriented companies in the world are facing a turning point after they have reached a certain stage of development, that is, problems of intergenerational transmission. "Like the Ford or DuPont of the United States, the family holds less than 50% of the shares, DuPont is 20%, Ford is less than 40%, and the Xu Fuji family still retains 40% of the shares after the acquisition. ”

Jiang Zezhong believes that the intergenerational succession is the sale or partial sale of self-employed companies at the international level to ensure the original investment returns, while leaving behind some of the shares that may extend the product brand. DuPont is such a model.

Wu Xiaobo, a well-known financial writer, also believed that the acquisition was part of Xu Fuji's family. The so-called joint-stock enterprise itself is an institutional arrangement for equity sales. Xu Fuji thinks that the price can be sold at a relatively good price.

According to Nestlé’s announcement, “According to the proposed agreement, Nestlé intends to acquire 60% of the shares of Xu Fuji, and the Xu family will hold the remaining 40%. Xu Fuji’s current CEO and Chairman Xu Xu will continue to lead the new Joint venture."

For Nestlé’s appeal, Professor Jiang Zezhong described it as “a center” and “two basic points.” A center refers to strengthening the market position in China - Nestlé milk powder incidents in the past few years show that Nestle is not a leader in the Chinese market. The two basic points refer to the product structure and sales network. Nestlé's products currently have more drinks, Hsu Fu-chi's sweets and confectionery products can enrich Nestlé's product structure; in addition, Xu Fuji's sales network structure has been spread to 2, 3 In the online city, Nestle controls Xu Fuji's sales network for his own use.

Easy to purchase, monopoly market is difficult to comply with the relevant provisions of the national anti-monopoly law, if the enterprises involved in the operator concentration, the global turnover in the previous year more than 10 billion, and at least two of them in the previous year business in China If the amount exceeds 400 million yuan, it should be investigated through anti-monopoly.

According to Xu Fuji’s latest financial report, its annual operating income and net profit for 2010 were 4.31 billion yuan and 602.2 million yuan respectively, and Nestlé is the world’s largest food manufacturer.

Regarding the prospect of the anti-monopoly review of the acquisition, Professor Jiang Zezhong stated to the “Corporate” reporter: “I think the Ministry of Commerce should approve it because generally speaking, the anti-monopoly law has stopped companies with high industrial concentration.” In his opinion, neither Coca-Cola and Huiyuan in 2008 nor Nestle and Xu Fuji now have reached the industrial concentration that requires a halt after their merger.

According to Professor Jiang Zezhong, the optimistic market share statistics of Nestle and Xu Fuji account for a combined 9% and conservative estimate of only 6%. Such industry concentration can be a “low concentration market” and does not have Stop conditions.

Wu Xiaobo, a financial writer, believes that the acquisition prospects can only be viewed from the laws of the market economy. Many mergers and acquisitions happening in China are easy to pass, while others are criticized by anti-monopoly laws because China’s anti-monopoly law itself does The more crude.

In addition to the huge amount of acquisitions, some analysts pointed out that due to the high market share of both parties in the Chinese candy industry, if the acquisition is successful, it is likely to have a huge impact on the candy industry.

Is such a "strong alliance" a monopoly on the domestic market?

The answer given by Prof. Jiang Zezhong is negative. “The confectionery industry does not have much technical content, and the market entry barrier is very low. Don’t say that the current industry concentration is very low, that is, when the concentration is relatively high, these Small-scale workshop manufacturers are not easy to be overthrown by big companies," Jiang Zezhong said.

With regard to the latest developments in the acquisition, the “Corporate” reporter called Xu Tianjie’s spokesperson Sun Tianzhen and manager of public relations department of Nestle China Co., Ltd. He Lan to inquire. Sun Tianzhen said that Xu Fuji has no further information available on the status quo; He Xin said that the acquisition case is still waiting for the approval of the Ministry of Commerce. The specific situation is based on the statement made by Yao Jian, spokesman of the Ministry of Commerce.

Whether protection is needed Back in the case of Coca Cola’s acquisition of Huiyuan in 2008, the protection of national brands has always been the focus of controversy. After three years, Nestle's acquisition of Xu Fuji is exactly the same, but people at this time are still waiting for an answer from the Ministry of Commerce, or a signal.

But does a company like Xu Fuji need state support or protection?

“He is a business and has nothing to do with the country.” In Wu Xiaobo’s view, the state is like an institution that has established a market. It is okay for companies to let them do business in one place. When there is bully to bully, they need to come forward and normal business practices. No need to interfere.

Professor Jiang Zezhong also has similar views. He believes that the confectionery industry is not a strategic industry, nor does it have a high technical content. In such industries, if the quality of the operators is improved, many competitive companies will soon be formed. The Hong Kong, Macao, and Taiwan-funded enterprises such as Xu Fuji actually spent a time lag, and they had an advantage in the early days of reform. Although business concepts, product concepts, and operational models were not as good as those of British and American companies, they were still more manageable than domestic companies. Some advanced.

"But now, the relative advantages of the year have been greatly weakened, and the market is facing a relatively fierce competition." Professor Jiang Zezhong said that under such circumstances, an effective solution is to pursue research and development by enterprises and highlight their own advantages. To occupy a strong market position, but if it is a relatively low-tech industry, this approach is too difficult. Therefore, companies generally choose to cooperate with others or sell.

“The transfer of enterprises and the use of international brands to protect their own survival are instinctive choices.” Professor Jiang Zezhong told the “Corporate” reporter that Xu Fuji had realized that he had done a very hard job and had not had enough dominant position. Normally, neither the consumer nor the industry has much harm.

Of course, the external environment for enterprise development is very important. The government should play its due role in the creation of market competition environment and the maintenance of market competition order. All competitors must abide by the order.

"That is to say, we must form a healthy competition, we can not shoddy, can not be fraudulent, can not harm the rights and interests of consumers, the environment is created is the best support for local companies." Professor Jiang Zezhong finally said.