China's Hungry Buyers Stumble With Some Overseas Acquisitions
Many of China's low-cost manufacturers, seeking greater exposure and fatter profit margins, are hungry to buy established global brands. But some of the first to gobble up well-known businesses in the West are suffering indigestion.
TCL Corp., the consumer-electronics maker, is piling up big losses on the RCA and Thomson television brands it bought in 2003. Lenovo Group, which acquired International Business Machines Corp.'s personal-computer division for $1.25 billion last year, becoming the world's third-largest PC maker, has seen its global market share shrink amid strategic missteps.
On a smaller scale, South Mountain Technologies Ltd., a venture set up by TCL and InFocus Corp. of the U.S., is cutting back its operations in the U.S. and Norway after failing to land a single contract for its TV components. Wanxiang Group, China's largest independent auto-parts maker, acquired a 21% stake in struggling Chicago-area parts maker Universal Automotive Industries Inc. only to see it liquidated in bankruptcy court last year.
Chinese companies still are relatively new to the foreign-acquisition game. In the past, they "looked to do joint ventures or to license technology," says Ling Wu, a director at Amherst Partners LLC, which advises Chinese companies. "As they have come up the learning curve and have more capital behind them, they're starting to think about buying access to the markets here."
Many of the deals have involved troubled businesses. IBM's PC division, for example, had cumulative losses of nearly $1 billion in the four years before it was sold to Lenovo. In making such deals, Chinese buyers bet they could use their low-cost manufacturing clout to turn the ailing operations around. They also hoped to piggyback on the brands' existing global distribution networks.
Those bets may yet pay off, and not every Chinese deal is struggling. Though Universal Automotive ultimately failed, some of Wanxiang Group's other Western investments have blossomed. Its success with Rockford Powertrain Inc. and Drive Line Systems LLC, both of Loves Park, Ill., encouraged Wanxiang to take a stake in a small Chicago medical-clinic installer, Paragon MedManagement LLC. Many of China's largest purchases have been production assets, where energy-producing properties have been folded into an existing business.
In some of their splashier Western forays, however, Chinese companies have been outbid, politically outmaneuvered -- or simply have lost their nerve. In July, for example, China Mobile Communications Corp.'s effort to acquire Luxembourg-based Millicom International Cellular SA, in what was expected to be a $5.3 billion deal, collapsed after the Chinese company got cold feet at the last minute. China Mobile and Millicom, which operates wireless networks in 16 developing countries, had been in exclusive talks since May.
Last year, China's Cnooc Ltd. drew a storm of protest inside the U.S. after making an $18.5 billion bid for Unocal Corp., an offer it ultimately withdrew.
But such setbacks haven't deterred Chinese companies from expanding abroad. Harbin Measuring & Cutting Tool Group, which recently acquired assets of German machine-tool maker Kelch GmbH, is scouting for acquisitions in the U.S. rust belt. Wanxiang Group has said it would be interested in buying assets from ailing auto-parts giant Delphi Corp.
Experts say the companies need to acquire international brand names because, with few exceptions, their own brands aren't well known outside China. "It seems a much smarter strategy to buy market share than try and transplant market share from China to the U.S.," says Douglas Porter, deputy chief economist at BMO Capital Markets Corp., an affiliate of Bank of Montreal.
But the stumbles by Lenovo and others are forcing Chinese companies to take a harder look at their acquisitions. Their experiences underscore how difficult it is to pull off a successful merger and how many things can go wrong.
Lenovo, among other things, moved too slowly to cut costs at the IBM PC division, which already had pulled out of the home-PC business and couldn't keep up with rapidly falling prices in the corporate market for PCs. TCL's chief misstep in integrating RCA and Thomson was its failure to anticipate a boom in consumer demand for flat-panel TV sets.
Lenovo, one of the best-known PC makers in China but with little name recognition beyond, had negotiated rights to use the IBM brand name for as long as five years after the deal closed. But it decided to go with the Lenovo name right away. Some experts believe that Lenovo didn't move quickly enough to expand into the small-business- and home-PC markets outside of China. It also dumped the IBM brand name prematurely, hurting sales outside China, says Roger Kay, president of consulting company Endpoint Technologies Associates Inc.
Now, Lenovo is trying to turn around the business -- in the face of slowing Western PC markets. It is attacking the high costs and fractious supplier relationships that IBM had in the U.S. and Europe. In December, Lenovo replaced Chief Executive Stephen M. Ward Jr. after just eight months on the job with William J. Amelio, a former executive at U.S. computer maker Dell Inc., who has moved more quickly to slash costs in the face of slower-than-expected sales growth. Under Mr. Amelio, Lenovo has cut payrolls by about 1,000 workers, or 5% of its work force, and consolidated offices to stem losses in the U.S. Last week, he reached into Dell for two more executives.
Lenovo's PC sales are up strongly in its home market, but it has lost share this year in both the U.S. and Europe, according to market tracker International Data Corp. IDC estimates Lenovo's share of U.S. PC shipments in the first six months of this year fell to 16% of all units from 17.5% a year earlier. Its ranking among PC sellers in Europe slipped to sixth place from fifth place a year earlier.
Lenovo's shares, which climbed 56% in the aftermath of the IBM unit purchase, yesterday closed just 4% above their pre-acquisition level in Hong Kong. The company posted a $5 million profit on $3.5 billion in sales in the fiscal first quarter ended June 30 on strong gains in Chinese PC sales.
Earlier this summer, TCL announced a restructuring due to continued losses at its U.S. and European operations. The company, which had focused on manufacturing conventional TVs and digital rear-projection models, was caught flat-footed as consumers stocked up on flat-panel TV sets last Christmas. Despite a booming market for digital TV sets, TCL's growth slowed sharply, and it briefly lost its crown as the world's largest TV maker to Korean rivals.
TCL's shares are near a five-year low, and have lost 75% of their value since the RCA deal was announced in November 2003. Its TV unit had a loss of $18 million in the first quarter, double its year-earlier losses. Last fall, it predicted a turnaround in its television business this year, but now won't say when the operation will be profitable. Earlier this year, TCL slashed its U.S. work force, laying off executives in its Indianapolis, Ind., marketing, design and business-development operations.
Unit sales in the three months ended in June were up 7.2% from a year earlier, but were well below the 22.4% growth rate of the three months ended last September.
In an interview earlier this year, Tomson Li, TCL's chairman, called the RCA/Thomson acquisition a modest success thus far. "We still believe we are headed in the right direction, but the speed is actually not as fast as what we expected," he said.
The same trend toward flat plasma-screen and liquid-crystal-display TV sets also hurt TCL's South Mountain joint venture with InFocus of Wilsonville, Ore. The venture, in which each company invested $10 million, was set up to supply them with components for rear-projection sets. Late last year, InFocus quit selling rear-projection TVs, leaving TCL as the venture's sole customer. South Mountain's goal of selling components to unaffiliated set makers "hasn't happened," says InFocus CEO Kyle Ranson, whose company hopes to sell its 50% stake this quarter.
TCL's Mr. Li acknowledged a lean and efficient operation isn't enough. It must become more innovative in the technologies that consumers want, he said, adding, "What we have to do is speed up the transition to flat panels in Europe and North America." In an effort to catch up, TCL announced plans earlier this year to buy flat panels for its new flat-panel TV sets from LG.Philips LCD Co., the Korean-Dutch joint venture.
Even so, it is expected to lose a key U.S. sales outlet when its current contract expires with the big consumer-electronics retailer Best Buy Co. Best Buy added new flat-panel TV brands, including Hewlett-Packard Co. and Westinghouse Digital Corp., and plans to phase out the RCA brand, they said. Spokesmen for TCL and Best Buy declined to comment.
中国企业收购海外资产遭遇消化不良
为扩大知名度、追逐更丰厚的利润，中国的许多低成本制造商都热衷于收购全球性知名品牌。但一些率先在西方国家购得知名品牌的中国企业却出现了消化不良的现象。
电子消费产品生产商TCL集团股份有限公司(TCL Corp.)在它2003年收购的RCA和汤姆逊(Thomson)电视机品牌上的损失正在日渐扩大。去年斥资12.5亿美元收购国际商业机器公司(IBM)个人电脑业务、并因此成为全球第三大个人电脑制造商的联想集团(Lenovo Group)由于策略上的失误，造成其产品的全球市场占有率开始萎缩。
TCL与美国InFocus Corp.成立的合资公司斯曼特微显示科技有限公司(South Mountain Technologies Ltd.)正在削减在美国和挪威的业务，该公司没能为其生产的电视元件签到一笔合同。中国最大的独立汽车部件制造商万向集团 (Wanxiang Group)几年前收购了境况不佳的芝加哥零配件厂商Universal Automotive Industries Inc. 21%的股份，但去年该厂还是没能避免破产清算的命运。
在收购外国企业方面，中国企业相对来说还是新手。为中国企业提供咨询服务的Amherst Partners LLC董事Ling Wu说，过去，中国公司喜欢成立合资企业或购买外国技术产品的使用权。
许多这类交易的对象都是原本境况不佳的业务。比如IBM的个人电脑业务在联想收购前的4年时间累计发生亏损近10亿美元。中国企业在决定收购这类业务时的想法是，可以利用自己成本低的优势扭转局面获得盈利。另一方面，他们也是想利用这些品牌已有的全球分销网络。
他们基于这样的想法作出的冒险举动将来或许会得到回报，而且，并不是所有交易都处于挣扎境地。万向集团收购的Universal Automotive虽然最后倒闭了，但该集团在西方国家的其他投资都见到了回报，如位于伊利诺伊州的Rockford Powertrain Inc.和Drive Line Systems LLC。这些成功案例促使万向又收购了芝加哥小型企业Paragon MedManagement LLC.的部分股权。中国许多大型收购针对的都是生产性业务。
不过，中国在收购西方企业时要么因为别人出价更高而望洋兴叹，要么因为政治因素而失利，或者索性就是因为不知所措而黯然退场。如今年7月，中国移动(China Mobile Communications Corp.)收购卢森堡Millicom International Cellular SA的计划因其最后一刻临阵畏缩而告吹。两家公司自5月份一直在进行排他性谈判，后者在16个发展中国家经营无线网络业务。
去年，中海石油(Cnooc Ltd.)曾出价185亿美元收购加州联合石油公司(Unocal Corp.)，此事在美国政界激起一片反对的声浪，最后中海石油撤回了投标。
但这些挫折并未阻挡中国企业在海外扩张的脚步。前不久收购了德国机床制造商Kelch GmbH的哈尔滨量具刃具集团(Harbin Measuring & Cutting Tool Group)正在美国老工业区物色收购对象。万向也曾表示，有兴趣收购身处困境的汽车零配件巨头德尔福(Delphi Corp.)的资产。
专家们表示，通常来讲，这些企业自己的品牌在国外的知名度都不高，因此需要收购具有国际知名度的品牌。蒙特利尔银行(Bank of Montreal)旗下BMO Capital Markets Corp.的经济学家道格拉斯?波特(Douglas Porter)说，与试图将在中国的市场扩大到美国的做法相比，通过直接收购获得市场占有率的策略似乎更明智。
不过，联想和其他企业的遭遇促使中国企业在收购问题上三思而行。这些企业的经历让人们看到要做成一笔成功的收购有多么困难，很多事都会发生变故。
比如联想，它在削减IBM个人电脑业务成本上的行动过于迟缓。IBM个人电脑业务在被收购前已退出家用电脑市场，而在商用电脑市场上也难以适应全行业价格迅速下降的潮流。至于TCL，它在整合RCA和汤姆逊方面的主要失误在于，它未能预见到消费者对平板电视的需求会如此火爆。
在中国市场大名鼎鼎的联想在国际上却鲜为人知。联想经过谈判获得了在交易完成后的5年内使用IBM品牌的授权。但后来它又决定随即开始使用联想自己的品牌。一些专家认为，联想在向本土以外的小企业及家用个人电脑市场扩张方面行动不够迅速。咨询公司Endpoint Technologies Associates Inc.总裁罗杰?凯(Roger Kay)说，联想还过早舍弃了IBM品牌，使其在国际市场的销售大受影响。
现在，随著西方个人电脑市场需求放缓，联想正努力扭转局面。它著手解决IBM在欧美国家成本过高及与供应商之间关系不顺的问题。去年12月，联想撤换了刚刚上任8个月的首席执行长沃德(Stephen Ward)，取而代之的是来自戴尔公司(Dell Inc.)的阿梅里奥(William Amelio)。阿梅里奥在销售增长不及预期的情况下迅速采取措施削减成本。阿梅里奥到任后，联想裁减了大约1,000名员工（占员工总数的5%），还合并了在美国的办事机构。上周，他又从戴尔挖来两名管理人员。
据市场研究机构国际数据公司(International Data Corp.，IDC)提供的数字，联想的个人电脑在国内市场销售势头强劲，但它在欧美市场的占有率今年却有所下降。IDC估计，联想今年前6个月在美国个人电脑总发货量中所占的比例从一年前的17.5%降到了16%。它在欧洲个人电脑销售商的排名从上年的第五位下滑了一位。
联想的股价在宣布收购IBM之后曾一度大涨56%，但近来已大幅回落。该股在香港股市周三的收盘价仅较其收购前股价高出4%。受中国国内销售业绩的强劲推动，该公司在截至6月30日的今年第一财政季度实现收入35亿美元，利润500万美元。
TCL今年夏天宣布，由于欧美业务持续亏损，决定对公司进行重组。该公司主要从事传统电视机及数字背投机型的生产。由于去年圣诞节消费者的兴趣转向了平板电视，公司被搞得措手不及。虽然数字电视市场一片繁荣，但TCL的增长幅度却急速放缓，其身为世界最大电视机生产商的桂冠也一度被韩国竞争对手夺走。
目前，TCL的股价已接近5年来的低点，与2003年11月宣布收购RCA后的股价相比已下跌75%。今年一季度，其电视机子公司亏损1,800万美元，亏损额较一年前增加了一倍。去年秋季，公司预计电视业务今年能有好转，但现在看来何时能扭亏增盈难以预料。今年早些时候，TCL在美国进行了裁员，位于印第安纳州印地安纳波利斯的营销、设计和商业发展部门遭减员。
该公司截至6月份的季度销量较上年同期增长7.2%，但低于截至去年9月的三个月22.4%的增幅。
TCL董事长李东生在今年初接受采访时表示，收购RCA/汤姆逊目前来看还算是一次成功的交易。他说，我们仍认为，我们的方向是对的，但速度没有我们预想的那么快。
等离子平面电视和液晶电视的市场趋势同样也让TCL与InFocus的合资公司斯曼特微显示科技公司很受打击。成立斯曼特的初衷是为了给两家公司提供配件。去年底，InFocus停止销售背投式电视，这使TCL成为合资公司的唯一客户。InFocus首席执行长凯尔?兰森(Kyle Ranson)说，向其他制造商供应部件的目标没能变成现实。InFocus希望本季度能售出其在合资公司所持的50%的股份。
李东生承认，仅仅做到精简和高效率还不够。公司必须在消费者需要的技术上有更多创新。他还说，我们必须做的是让欧美业务更快地转向平板电视市场。为了迎头赶上，TCL今年早些时候宣布，将向LG.Philips LCD Co.购买平板用以生产新的平板电视机。
即便如此，到它与美国大客户Best Buy Co.现有合约到期后，它很有可能失去在美国的这个主要的销售渠道。Best Buy新增了很多平板电视品牌，包括惠普(Hewlett-Packard Co.)和Westinghouse Digital Corp.等，还计划逐渐撤出RCA品牌。TCL和Best Buy发言人均拒绝置评。
Gary Mcwilliams / Evan Ramstad
