Philips buy Pentium Electric: National brand "When the pig sells" is not worth

According to the Xinhua News Agency, Shanghai, June 12, informed sources confirmed on the 12th that Philips will purchase Pentium Electronics from RMB 2.3 to 2.5 billion, and the two parties will formally announce the acquisition details after completing related procedures within 1-2 months. This is after the United States Yum! Foods Group announced the acquisition of Little Sheep, foreign capital once again acquired and acquired Chinese private enterprises.

The purchase price is "very cost effective"

According to informed sources, the assets acquired by Philips include Pentium's full range of small home appliances and equipment, brands, marketing networks and operations teams. Pentium Electric's land property and plant in the industrial park in Songjiang, Shanghai, were not sold to Philips, but instead they partnered with Philips through leasing. After the acquisition is completed, Pentium Electric will become a wholly-owned subsidiary of Philips in China, and Philips will assign teams and management personnel to the new company.

The reporter rushed to the Pentium Group on the 12th (Editor's note: Shanghai Pentium Enterprise (Group) Co., Ltd. website said that the Pentium Group is an integrated high-tech enterprise that integrates R&D, manufacturing, and sales of household appliances, and its “POVOS Pentium” successively The company was awarded the "Shanghai Famous Brand," "Shanghai Famous Brand," "China Famous Brand," and other honorary titles. It was learned during the interview that the company is currently operating normally. The sale of Pentium Electric was not due to operational difficulties or financial constraints. According to reports, Pentium Group has four major businesses, one is the production of electromagnetic ovens, rice cookers, electric pressure cookers and other kitchen appliances Pentium appliances; the second is the production of razors and other personal care products Pentium electrician; third is the production of drinking fountains and other products Water Treatment Technology; Fourth, HOMA, Japan's top golf product brand acquired last year. The sale of Pentium Electric (Shanghai) Co., Ltd., which was incorporated on January 1 this year, will be on sale. New Huadu Group, which holds a 19.9% ​​stake in Pentium Electric, also explicitly told reporters that the acquisition did not involve Pentium Electric.

A person in charge of a small home appliance manufacturing company expressed surprise at the purchase price of 2-3 billion to 2.5 billion Phillips. "From the point of view of Pentium's production scale and sales profit, this price is very cost-effective for Pentium Electronics. Liu Jian has more than 2 billion yuan in state-owned funds and will have better support for Pentium's other projects."

According to media reports, the domestic sales of the Pentium Electric Small Appliances Business from January to May of 2011 was RMB 400 million, which was a sharp increase of 39% from RMB 280 million in the same period of last year. In 2010, the sales of Pentium Electric Small Appliances (including drinking fountains) was 790 million yuan, and sales in 2009 were 590 million yuan.

"When the son raises, when the pig sells"

Luo Qingqi, a domestic appliance expert and a senior director of Pare Consultancy, believes that this acquisition will not lead to changes in the domestic small home appliance market. After all, the scale of Pentium appliances is relatively small.

Despite fierce market competition, the profit rate of small household appliances is still higher than home appliances such as TV sets and refrigerators. The small home appliance market is regarded as “the last profitable cheese in China’s home appliance industry”. At the same time, small home appliances are generally not as demanded as home appliances. With higher technological content, production costs usually account for a large proportion, while China has a cost advantage. The reason why foreign-funded enterprises are willing to acquire small household electrical appliance enterprises in China is precisely because these companies have good sales performance in the country, but at the same time they have a cost advantage.

According to Lu Jiebo, deputy secretary-general of the China Electronic Chamber of Commerce, from this (Philips) acquisition (Pentium Electric Company), the value of eliminating competitors is even greater. It is foreseeable that after the acquisition of Pentium by Philips, the Pentium brand will not be used.

In recent years, after the foreign mergers and acquisitions of China Toothpaste, Robust, Supor, Little Nurse, Dabao, Nanfu Battery, Lubricants, Harbin Beer, etc., some brands have faded away and some have become non-mainstream niche brands. Experts believe that foreign investment cannot be completely negated on the grounds of protecting national brands, but private entrepreneurs must weigh the pros and cons of the company when they are sons and sell pigs.

Any Manqing who is the research center of the Institute for Multinational Corporations of the Ministry of Commerce stated that private entrepreneurs have chosen to “sell pigs to raise fertilizers”. They also have certain practical considerations, or have encountered development bottlenecks in funding or management. The brand name is not immutable. Today is a brand name. It may not be anything tomorrow. If you say it, you will fall, and the market competition is very cruel.

Some experts believe that national brands cannot be protected like cultural relics. The choice of M&A reflects the helplessness and anxiety experienced by some Chinese companies in the face of fierce market competition and development bottlenecks after experiencing an initial period of rapid growth. Therefore, "selling" and "not selling" should not be generalized. It is necessary to make a comprehensive assessment and think twice before proceeding.