Chinese firm to buy Ingram Micro for $6 Billion—in cash
Overnight, it was confirmed by several news outlets that Chinese aviation and shipping conglomerate HNA Group reached an agreement to buy electronics distributor Ingram Micro Inc., for roughly $6 billion—all paid in cash. The move is just the latest in a string of overseas deals by companies based in China looking to sidestep the economy’s slumping domestic growth.
According to Reuters, the offer of $38.90 per share from HNA unit Tianjin Tianhai Investment Co. Ltd. Represents a 31 percent premium to Ingram’s closing price on Wednesday.
The Irvine, California-based company said the deal would help to increase investment and expand its global reach.
“Our agreement to join HNA Group delivers near-term and compelling cash value to our stockholders and we expect it to provide exciting new opportunities for our vendors, customers and associates,” Ingram Micro CEO Alain Monié said in a statement. “Innovation, new services introduction, brand management and ensuring the stability and continuity of the businesses joining their enterprise are fundamental to HNA Group's overall strategy. As a part of HNA Group, we will have the ability to accelerate strategic investment, as we continue to capitalize on the constant evolution of technology and emerging trends by adding expertise, capabilities and geographic reach. Additionally, Ingram Micro will now be part of a larger organization that has complementary logistics capabilities and a strong presence in China that can further support the growth and profitability objectives of our vendor and customer partners."
Through the deal, Ingram Micro will become a subsidiary of the HNA Group. Monié will remain in place as the chief executive, and he said he did not anticipate any disruptions in the current flow of business within his company.
"Ingram Micro has clearly established itself as a leading distributor and global provider of IT products and services,” Adam Tanm vice chairman of the board of directors and CEO of HNA Group, said in the statement. “The company has a proven and talented team and we believe Ingram Micro is unrivaled in its ability to offer industry-leading, differentiated and easy-to-manage solutions to vendor and customer partners worldwide. We look forward to supporting Ingram Micro's management team and strategies, including continued expansion into new geographies, while also offering their vendor and customer partners access to new and complementary offerings. We share Ingram Micro's commitment to integrity, innovation and performance.”
Tan added that after the transaction, Ingram Micro would become the largest member enterprise of the HNA Group in terms of revenue and that it would help them reach “better business opportunities in emerging markets, which have higher growth rates and better profitability.”
The transaction is subject to regulatory approvals in the various jurisdictions involved, as well as the approval of Ingram Micro’s and Tianjin Tianhai’s stockholders, and the satisfaction of other customary closing conditions.