XCMG M&A is expected to land in the near future

Recently, whether XCMG's new restructuring plan has been approved has become the focus of media attention again, but some domestic and foreign media have carried out completely different reports. According to industry analysts, these news indicate that whether XCMG's new plan is approved will be settled in the near future.

On November 12, some domestic media reported that "the SASAC has approved Carlyle's new plan to acquire XCMG" and "currently it is only awaiting the final approval from the Ministry of Commerce". On the 14th, another domestic media reported that the relevant person in charge of the State-owned Assets Supervision and Administration Commission of the State Council stated that the relevant ministries and commissions were studying and negotiating the approval of Carlyle's new plan to acquire XCMG's equity, and the SASAC would then enter the review process.

The British "Financial Times" published a seemingly contradictory report on the 14th. The article began, "The acquisition of XCMG shares by the US private equity firm Carlyle Group has been approved by a key government department (the State-owned Assets Supervision and Administration Commission). , marking an important hurdle for the controversial transaction." But at the end, he added: "A person familiar with the matter said that this transaction has cleared an important obstacle (the Carlyle Group has been reduced from controlling 85% of XCMG to acquiring 50% of Xugong Machinery). % of the shares) and all concerned hope that the remaining ministries will approve the deal in the next few weeks.” “He said that the SASAC would not approve the deal unless other central government ministries had generally approved it.”

A senior executive of XCMG Group told this reporter that XCMG has not received any relevant approval documents.

According to an analysis by an industry insider, the media made different reports on whether or not the new plan of Carlyle's acquisition of Xugong was released, reflecting the cautiousness of government departments. He analyzed that it is very likely that the SASAC has agreed to a new merger and acquisition plan, but considering various factors, it has not officially announced the news.

A senior person in the construction machinery industry told this reporter: "The industry understands Carlyle's acquisition of XCMG." He believes that China's construction machinery industry has always been at a disadvantage in the high-end product market, which is an important reason There are many weaknesses in spare parts, and China has reached a considerable level in vehicle manufacturing and system design. Therefore, there is no major hidden danger in mergers and acquisitions or joint ventures like XCMG, especially after the ratio is adjusted to 50% for both parties. And companies in the most basic industries like Luozhou should be cautious when they are acquired by foreign capital. He analyzed that it is very likely that Carlyle's new plan to acquire XCMG will be approved.

On October 25, 2005, Carlyle and XCMG and XCMG signed a series of documents including the Equity Sale and Share Subscription Agreement. Carlyle planned to purchase 85% of XCMG's shares at a price of US$375 million. , but no result. On October 16 this year, after many discussions, the parties revised the agreement again, and Carlyle's shareholding ratio was reduced from the original 85% to 50%.

It is understood that for the transfer of state-owned property rights involving foreign capital and changes in the nature of the equity of listed companies, the procedure should be to conduct asset evaluation first, and then both parties sign a transfer agreement. The most important thing is to review by the State-owned Assets Supervision and Administration Commission and the Ministry of Commerce, and report to the Securities Regulatory Commission for the record.

An industry insider also told reporters that at present, various ministries and commissions are coordinating, and it is estimated that the new plan will not be delayed for too long.

Previously, the senior leaders of XCMG Group told this reporter that Carlyle's acquisition of XCMG has been delayed, and it has become the focus of public opinion, involving a lot of time and energy of XCMG Group. Wang Min, chairman of XCMG Group, said in an interview with this reporter: "The restructuring of XCMG is carried out in accordance with legal procedures and can withstand the test."

Carlyle also spent a lot of time and money on this matter. , Although a senior Carlyle recently stated that the acquisition in China will not be affected, the relevant person believes that if the matter is rejected, it will lead to Carlyle becoming more cautious and conservative in domestic investment.

On November 9, the National Development and Reform Commission officially released the "Eleventh Five-Year Plan for Utilizing Foreign Capital", which defines the policy framework for my country's foreign investment utilization in the next five years. During the "Eleventh Five-Year Plan" period, my country will strengthen the review and supervision of mergers and acquisitions of sensitive industries and leading enterprises to ensure the state's development dominance in these industries. Previously, the "Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors" came into effect on September 8. Whether the new plan of Carlyle's acquisition of XCMG can be successfully approved has once again become the focus of the market.

Recently, the head of the Department of Treaty and Law of the Ministry of Commerce pointed out that on the one hand, it is necessary to actively promote the absorption of foreign capital through mergers and acquisitions;