Closing ceremony of the hottest Carlyle's acquisit

Carlyle's acquisition of XCMG case ends with Carlyle's acquisition of 45% of XCMG's shares. This merger is destined to remain in Contemporary Chinese economic history. After all, our attitude towards foreign investment will change from blindness to rationality. I am very calm now. Wang Min, chairman of XCMG group, made a statement to

Carlyle's acquisition of 45% of XCMG's shares will come to an end. This acquisition is destined to remain famous in contemporary China's economic history. After all, from now on, our attitude towards foreign investment will change from blind to rational

"I'm very calm now." Wang Min, chairman of XCMG group, told on March 19. In the second half of 2006, Carlyle Group acquired 85% equity of XCMG machinery under XCMG group, which became a hot topic in domestic finance and economics. This topic has the necessary elements of all hot topics: shady trading, the sale of state-owned assets, and threats to national industrial security. And Wang Min is one of the main planners of these "plots"

the two sides involved in this matter are also easy to multiply people's interest: XCMG, the leader of China's equipment manufacturing industry. Carlyle, the world's largest private equity investment fund, is an investment institution known as the "President's Club" with a total of 305 entries in 24 categories due to the fact that many state leaders hold important positions in the fund

it was Xiang Wenbo, general manager of Sany Heavy Industry, a competitor of XCMG, who exposed the "conspiracy". He said on his blog that China's machinery industry would be in crisis due to this merger and acquisition. He did not expect that this would trigger a big discussion sweeping China, and the final result would even reverse China's traditional attitude towards foreign investment

origin

when Wang Min went to Hong Kong with Xuzhou municipal government officials to hold the Xuzhou Economic and trade negotiation and promotion conference in March 2004, he did not expect that a project in this investment promotion conference would become a bomb two years later

after the Hong Kong Fair, XCMG published a global announcement of "recruiting sons-in-law" in Hong Kong economy in April. XCMG group is a local state-owned enterprise in Xuzhou. It wants to restructure by introducing investors, or simply, the Xuzhou government wants to sell most of the equity of XCMG group, the largest local enterprise

it may be a common problem of the old state-owned enterprises. XCMG group also carried out debt to equity swap to reduce the burden caused by the company's heavy bank loans and embark on development with light equipment. Introducing new funds and investors is undoubtedly one of the ways to accelerate development

China Huarong and other four asset management companies took over the company's debt in 2002 and converted it into corresponding equity. These four asset management companies solved the problem of heavy bank debt of many state-owned enterprises in a similar way

this equity was once on the agenda of resale by the four major management companies, but XCMG group "redeemed" this equity, accounting for about 48% of XCMG with 680million yuan through loans. In a sense, XCMG's transaction is very "smart". According to the calculable caliber, the "redeemed" equity will be sold at about three times the price. However, XCMG's transaction of appreciating state-owned assets was not mentioned in the condemnation of the sale in 2006

investment institutions have successively come to Xuzhou to inspect XCMG and negotiate the acquisition. "Since the second half of 2004, more than 30 institutions have come." Wang Yansong, deputy general manager of XCMG group, recalled on March 19 that he was the main negotiator of XCMG in the acquisition. Among the 30, there are Carlyle, JPMorgan Chase and other international investment funds, caterpillar, a world giant in the same industry, and Sany Heavy Industry, a Chinese industry giant. Sany Heavy Industry is a private equipment manufacturer in China, with rapid development. It was at this time that the "enemy" was formed. Xiang Wenbo, the CEO of Sany Heavy Industry, triggered the discussion of Carlyle's acquisition of XCMG through his blog in the summer of 2006

around 2002, private equity funds quietly sneaked into mainland China. At that time, the domestic understanding of private equity investment funds was still shallow. The big discussion of Carlyle's acquisition of XCMG, which alerted the government and the public, put the private equity fund, which had previously been low-key, on the front stage

at that time, Chinese people only knew that venture capital funds (VC for short) could turn stone into gold through the way that a company listed on NASDAQ created China's young rich. However, private equity investment funds (PE for short) are completely different from VC. PE's investment direction is generally mature enterprises. Through debt restructuring, the introduction of advanced management mechanisms, the introduction of good projects and other ways to make "old trees sprout", VC is an enterprise that may succeed in early investment at great risk. Both are private equity funds, but their nature is different. The fund of Carlyle's acquisition of XCMG, which was brought into discussion this time, belongs to pe The following points need to be clarified about the friction coefficient experiment from 2004 to 2005: in October, all the protagonists appeared: XCMG, Carlyle and Sany Heavy Industries, which want to sell their shares. The climax of the play came eight months after the protagonists all appeared

attack

a blog post on June 6, 2006 made a "son-in-law Recruitment" action led by Xuzhou municipal government a major event. The situation had been stable before, and there had been no big waves. This blog was written by Xiang Wenbo, who expressed his willingness to replace Carlyle with a 30% increase in Carlyle's price. This is his first blog about Carlyle's acquisition of XCMG

according to the acquisition agreement initialed by the two sides in Nanjing on October 25th, 2005, Carlyle will acquire 85% equity of XCMG machinery at a price of more than 2 billion yuan

then, Xiang Wenbo gradually enriched the event in his blog: Sany Heavy Industry had long been in contact with Xuzhou, but lost the qualification to be selected in the next round. The seven institutions that entered the second round were all international consortia

Xiang Wenbo also believes that choosing Carlyle may be a well arranged "game". There are data to support his view, because he received a bid of 3.198 billion yuan from JPMorgan Chase fund, a competitor of Carlyle. Obviously, this figure is intuitively much more generous than Carlyle

however, Xuzhou has set a lot of thresholds for "Zhao son-in-law". Therefore, for testing the tensile properties of flexible packaging materials, it needs to be equipped with a large stroke of tensile machine method, which is simply measured by the amount of money: whether it can bring new projects and new technologies, and XCMG has a veto right when exiting to prevent being controlled by industrial capital, the retention of XCMG brand and other complex terms. Carlyle has the highest comprehensive score, which is the judgment of Xuzhou municipal government and XCMG group. These opaque so-called scores are tailored for Kayley - this is the judgment of the opponent Xiang Wenbo

based on this completely different judgment result, this acquisition, which has been running smoothly for nearly 8 months and is waiting for the approval of the State Administration, has evolved into a big war with Xiang Wenbo

by June 24, 2006, Xiang Wenbo had published 14 articles on his blog in 18 days, all of which were crucial. In his blog, many transaction details and figures that had not been disclosed were disclosed, while XCMG did not make any positive response to the details

therefore, the views of the participants in the discussion began to be one-sided: through shady trading, Carlyle was determined to be sold to Carlyle and sold at a low price so that Carlyle could make huge profits through this local state-owned enterprise in China, which would also greatly harm China's industrial safety in the equipment manufacturing industry

all these things have gradually condensed into the national spirit, and the logical relationship that selling XCMG is selling the country has gradually established

similar painful memories, such as selling state-owned assets at a low price in the name of restructuring, and the brand losing competitiveness after Chinese enterprises were acquired by foreign capital, have been constantly refreshed in this big discussion, especially making Chinese people feel unforgettable pain

on the one hand, Xiang Wenbo is aggressive, on the other hand, XCMG and Carlyle are silent and evasive. From the behavior, it is also easy to understand why public opinion has been one-sided for more than a month since June 2006

XCMG is hard to argue. The international practice is that this kind of acquisition is a trade secret, and the core data cannot be published. "You can't believe us, but these documents are completely transparent at the regulatory level. The management department can review these documents at any time. Do you dare to tell lies?" On July 6th, 2006, Wang Yansong told this newspaper

at this time, there is also a blog about XCMG on the Internet, which is tit for tat with Xiang Wenbo's blog view. The two sides have written to each other, with swords and swords. The people waved flags and shouted, and the folk hidden dragons and crouching tigers appeared

in this bustling June, there is another event that doubts all sentient beings: Fu Jian, the general manager of XCMG group, received the transfer order from the municipal government at the beginning of this month and served as the general manager of Xuzhou state owned Assets Management Co., Ltd., which mainly engaged in the business of public facilities investment. In an interview with this newspaper on June 26, 2006, Fu Jian believed that "this transformation is a little big for me, and I prefer to be an enterprise"

due to Fu Jian's opposition to selling XCMG to foreign capital, the transfer at this critical moment is undoubtedly pouring oil into the fire

every thing that cannot be explained from formal channels has become a symbol to mark the progress of the event, and these symbols have been given different meanings by different parties. The IQ of all parties involved in the discussion was severely tested

a month later, this discussion shocked the upper level

hearing

from July 17 to 19, 2006, in the afternoon of three consecutive days, the Ministry of Commerce convened all units related to the Carlyle XCMG merger and acquisition case to solicit opinions in batches and ask detailed questions. Wang Min and Wang Yansong of XCMG group, who were called to Beijing, and the heads of Xuzhou municipal government and Jiangsu Provincial Department of foreign trade and economic cooperation, met dozens of questions in three days. According to the participants' recollection of this newspaper, every doubt was involved in the problem, and everything that could not be said publicly was said at the hearing

Xiang Wenbo and Liang Wengen, chairman of Sany Heavy Industry, also received a notice from the competent department to go to Beijing. Both sides of the debate received inquiries from the management department at the same time in different venues in the same compound

this is the first hearing held in China for enterprise acquisition, although this procedure is common in many countries

Wall Street commented that this event is a watershed for foreign investment funds to enter China, which is not excessive. After all, this incident showed the uniqueness of the originator from the beginning of the discussion to the intervention of the management department, and a new "provisions on mergers and acquisitions of domestic enterprises by foreign investors" was promulgated on August 8, shortly after this hearing. The coincidence of various changes in time makes the process of this event recorded in history

after the hearing, no specific guiding opinions came out

with the development of the situation, big people also gradually appear. David Rubinstein, the founder of Carlyle, flew to Beijing to pay a low-key visit to many officials of relevant ministries and commissions. On the same plane, Powell, the former US Secretary of state, arrived to communicate about Carlyle's acquisition of XCMG