NEWS
Exclusive interview with Dr. Qing Ding with German magazine M&A: 'The annual general meeting was fantastic.'
- 2017-08-09
- 13:54
About M&A CHINA/GERMANY
The ‘M&A CHINA/GERMANY’, a China-Germany M&A platform, was established in 2014. The platform, with mutual project sources from its subsidiary magazines ‘Entrepreneur Magazine’ and ‘M&A Review’, serves as a bridge for all institutions engaged in professional cross-border M&A transactions and committed to cultural exchange, as well as people who believe firmly in development of cross-border M&A.
About: Exclusive Interview with Dr. Qing Ding
Character Introduction:
Dr. Qing Ding is the Founding Partner and President of Shentou Investment Co., Ltd. He is a pioneer in the China-Germany M&A industry, with over 25 years of experience.
Before founding Shentou Investment Co., Ltd. in 1998, he served as a senior advisor to the Chairman of the Board of Directors at China’s first trust institution and Shenzhen Holdings Co., Ltd. during the privatization of state-owned enterprises.
In 1992, Dr. Ding served as a consultant to the Matuschka Group and participated in the acquisition of the Renak bicycle factory by Tianjin Feige. This marked the first acquisition of a German company by a Mainland Chinese acquirer in M&A history.
Exclusive Interview Excerpts
M&ACHINA/GERMANY Reporter: What was the role of Shentou Investment Co.Ltd., when Jifeng joined Grammer?
Dr. Ding:Shentou Investment Co.Ltd. was the Chinese consultant of Grammer AG. Our mission was to seek and identify potential Chinese partners for Grammer. We visited and discussed with a number of candidate companies, including sovereign wealth funds, investment funds for OEMs and several industrial enterprises. A few of them expressed willingness to start preliminary negotiations. After negotiations last December, a project team consisting of Grammer’s supervisory board, board of directors and staff council representatives arrived in January for the final round of review and determined to select Jifeng as Grammer’s Chinese partner.
Reporter: Can you talk about strategic outlook of cooperation between Jifeng and Grammer?
Dr. Ding:Ningbo Jifeng and Grammer will pilot joint projects and joint ventures on the Chinese and other markets. Through planned cooperation, both companies will continue to expand their strength in the key market in China to provide better products for existing customers.
Compared with Grammer, Jifeng owns very similar business fields and is a rapidly growing Chinese supplier. The partnership with Grammer will surely help Jifeng continue to rise on the international stage.
Reporter: How do you evaluate this year’s Annual General Meeting and its achievements?
Dr. Ding: The Annual General Meeting was very exciting, with a sensational high shareholder attendance rate of 67%. The majority shareholder of Grammer AG dismissed all of Cascade’s additional proposals with majority votes and opposed the deliberate change of supervisory board members. The clear vote of shareholders was an acknowledgment to Grammer AG’s strategies and architecture. It was very impressive to me.
Grammer Equity Dispute
Since February 2017, the fight to control Grammer AG’s shareholding interest has gained the attention of the whole industry.
Due to Grammer AG’s stake diversification in 2016, Hastor family increased their holdings via the secondary market all the way to become the group’s largest shareholder. In early February 2017, the family demanded replacing group’s existing supervisory board and management board in order to gain full control of Grammer.
To stabilize the situation, Gammer’s management board invited Shentou Investment Co. Ltd. as their M&A consultant; In extreme stressful moments, the latter managed to lock up Jifeng Holding Co.Ltd. as Grammer’s White Knight. In particular, Shentou Investment assisted Grammer in issuing Mandatory Convertible Bonds to Jifeng and led further M & A transactions. Through a series of operations, Jifeng ended up holding an approximate 15.07% of Grammer’s total shares in advance of the Annual General Meeting, representing corresponding voting right and strong support for Grammer.
This marks the first time Chinese investors participated as White Knight in the M&A of German-listed companies. As a result of this incident, during the shareholders’ meeting on May 24, the majority shareholders of Grammer AG, including Jifeng, rejected the proposal to replace the management and supervisory board, thus preventing turmoil and stoppage of Grammer AG.
For Grammer, fending off a hostile takeover at the Annual General Meeting was a declaration of independence and phased triumph.