Looking forward to 2015, the LED Industry Institute believes that the LED industry chain mergers and acquisitions integration will show the following five trends:
Trend 1: The overall merger and acquisition amount will exceed 20 billion, and the number of mergers and acquisitions with a scale of more than 500 million yuan will increase.
Trend 2: LED indoor lighting mergers and acquisitions will break through and become the most important protagonist. In industry integration, the absence of the most important link means that the industry has not yet entered the climax of integration. The critical period of integration has begun in 2015.
Trend 3: The deadlock in mergers and acquisitions in the upstream sapphire and chip industries will be broken. At present, there are almost no cases of integration of LED upstream sapphire and chip industry chains, and the few cases are not strong alliances or complementarities. It is expected that in 2015, there will be successful mergers and acquisitions in the sapphire and chip sectors.
Trend 4: Traditional lighting companies will focus on mergers and acquisitions. Most traditional lighting companies have advantages in domestic channels but weak export links. Their international brand awareness is basically zero, but there is still a lot of room for development in exports.
Trend 5: Mergers will move toward internationalization. Overseas merger cases will increase. As outstanding domestic LED industry chain companies increase their intention to go abroad, the integration of overseas LED lighting industry chain companies and channels will be put on the agenda.
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Looking back on 2014, mergers and acquisitions in the LED lighting industry surged, with more than 100 related mergers and acquisitions cases, and the merger and acquisition amount exceeded 10 billion yuan. Among them, there are more than 20 merger and acquisition cases of listed companies in the LED industry chain, with the merger and acquisition amount exceeding 6 billion. Among the mergers and acquisitions of listed companies, Feile Audio acquired 100% of Shen'an Group's equity for 1.59 billion yuan, Tsinghua Tongfang acquired 51.6% of Zhenmingli's equity for 900 million Hong Kong dollars, and Changfang Optoelectronics acquired 60% of Kangmingsheng's equity for 528 million yuan, ranking the top three.
An overall look at the mergers and acquisitions cases of listed companies shows the following four characteristics:
1. In 2014, the mergers and acquisitions of listed companies in the LED industry chain showed active cross-border mergers and acquisitions, mainly complementary mergers and acquisitions. For relevant information, please refer to the 2013-2018 China LED Industry Market Survey Report released by the China Report Hall.
2. The proportion of horizontal integration of the company's main business is very small. The only M&A cases of horizontal expansion of the main business are Lianjian Optoelectronics' acquisition of Estar, Hongli Optoelectronics' acquisition of Smed, and Unilumin Technology's acquisition of Lamp Technology.
3. Indoor lighting companies were absent from the M&A feast. As the most important engine for the development of the LED industry, indoor lighting companies were left out in the wave of mergers and acquisitions in 2014. The LED Industry Research Institute believes that the main reasons are: 1) Most of the LED indoor lighting companies with terminal sales channels are transformed from traditional lighting companies. Pure LED lighting companies are basically export-oriented. These two types of companies are relatively difficult to control for current LED listed companies. 2) Excellent LED indoor lighting companies are planning to go public, but their intention to be acquired is not strong, and the cost of mergers and acquisitions is also very high. Therefore, even though there are several LED indoor lighting mergers and acquisitions cases that are still in the early stage of contact negotiation, there are currently no successful mergers and acquisitions cases.
4. The mutual integration between traditional lighting companies and LED lighting companies is not obvious. This is related to the fact that the LED lighting industry is currently in its golden development period and the horizontal integration of the industry is in the early stages of brewing. As for traditional lighting companies, there are relatively few domestic traditional lighting listed companies. Currently, there are only a few companies such as NVC, Sunshine, Xuelite, Fozhao, and Yaming. However, TCL and Midea Lighting still account for a small proportion of the group's scale, making it difficult to operate on a large scale. For international companies, it is difficult for domestic LED lighting companies to get into the eyes of international companies. Regarding LED lighting companies, there is currently no listed company focusing on LED indoor lighting.
Regarding mergers and acquisitions related to the LED industry chain, industry insiders said that as competition in the LED lighting industry chain intensifies, companies are facing greater competition and survival pressure, and the LED industry only has 2-3 years of prime time left. Excellent enterprises in the industrial chain need to change their concepts. Obtaining funds through mergers and acquisitions and achieving indirect listing is also a very good way. For most companies with financial strength, it will be more effective to grow rapidly through mergers and acquisitions, rather than gradually growing in scale through their own expansion of production and construction channels. According to the current trend of mergers and acquisitions in the industry, it is a high probability that tens of billions of companies will emerge in three years. Domestic enterprises need to have an international vision. International enterprises such as Philips, Osram, GE, and CREE also use mergers and acquisitions as an important means to continue to grow and develop. In the process of going global, whether domestic enterprises can successfully use mergers and acquisitions strategies will determine the success of their internationalization.
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