The Prospect Of Chinese Enterprises Taking Overseas Mergers And Acquisitions Needs To Be Investigated.

Recently, the garment industry has encountered bottlenecks. How to face the difficult period, the domestic garment enterprises choose overseas mergers and acquisitions, but the development prospects still need time to test.

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Once again, enterprises are acquiring overseas companies.

Recently, Shandong Ruyi group, one of the largest textile manufacturers in China, announced the acquisition of the controlling stake in French SMCP from the global private equity giant KKR, with a purchase price of 1 billion 300 million euros.

It is reported that France's SMCP luxury light brand Sandro and Maje will soon visit Tmall platform.

Sandro and Maje are popular among young consumers because they often appear on the streets of celebrities and fashions. Besides, SMCP also has ClaudiePierlot brand.

Public information shows that these three brands have maintained a good momentum of development in recent years, with sales growth reaching 32.5% in 2015, driving SMCP group's revenue up 33% to 675 million euros.

As of December 31, 2015, SMCP has 1118 stores in the world, including 60 stores in Greater China. It is estimated that 90-100 new stores will be opened in 2016, of which about half of France's local market is sold.

In September last year, KKR, a privately held fund holding SMCP, decided to bring it to market.

Earlier this year, the news was called Shandong.

The offer was submitted, but the differences between the two sides in the paction price led to a stranding negotiation. In early March, SMCP submitted a IPO registration document to AMF, the French financial market regulator. At that time, it was widely believed that Shandong's Ruyi acquisition plan would fail, but eventually SMCP was still trapped in its income.

Not only that, Sandro and Maje brands will also visit Tmall platform in the near future, and SMCP hopes to achieve the same progress in China's online business and store expansion. At present, SMCP is increasing its layout in the Chinese market, and its sales accounted for 6.2% last year, up 138%.

This is not the first attempt to make overseas acquisitions in Shandong. As early as 2010, it has become the largest shareholder of RENOWN, a famous Japanese garment manufacturer, with a purchase price of about 310 million yuan. In 2013 and 2014, it was invested in the Scotland tweed production enterprise Carloway and the German menswear enterprise PeineGruppe with Barutti and Masterhand brands.

It is not only Shandong's good intentions. In recent years, domestic garment enterprises are taking frequent actions in overseas mergers and acquisitions.

Recently, foreign media reported two mergers and acquisitions related news related to Chinese enterprises. The associated company of textile company Yongsheng New Material Co., Ltd. bought Desseilles, a French lace producer, and one of three companies that made a takeover offer to France's luxury luxury brand PierreBalmain from China.

Last year, the listing of singer, overseas mergers and acquisitions also showed an accelerating trend. Shortly after the listing, the German high-end women's clothing brand Laur & L and its mainland operation company were acquired by 84 million 60 thousand yuan, and in January this year, they announced that they had acquired 65% stake in Tang Li international with 240 million yuan. The company owns the brand equity of American light luxury brand EdHardy in Greater China, and EdHardySkinwear and BabyHardy brands.

Not only that, last year, the men's clothing business card slave road purchased 51% of Italy DirkBikkrgs company for 40 million 680 thousand euros, and the high-end women's clothing brand, mensfield, bought the Italy brand Krizia with a market value of 500 million US dollars, and then adopted the Korean subsidiary's 180 million yuan to acquire Korea's largest infant clothing brand AGABANG.

According to industry analysis, in the case of bottlenecks in the domestic market, overseas mergers and acquisitions of garment enterprises provide high-end opportunities for pformation, enrich their own product mix, enhance brand image and expand international business opportunities. In recent years, more and more garment companies have been listed on the market.

Channels also increased the strength for overseas mergers and acquisitions.

However, the acquisition is still the first step. How to continuously invest and manage the brand acquired is a new topic for domestic garment enterprises, lacking corresponding talents and experience.

Guo Lian securities research report said that Shandong's acquisition of SMCP is an extension of its industrial chain dominated by wool and men's wear. However, the supply chain of women's clothing is higher than men's management requirements, and the return order and design requirements are faster. Therefore, it is still to be seen how the two will play a synergistic effect in the future.