The hottest Rhodia group plans to acquire Feifei c

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Rhodia group plans to acquire Feifei chemical for us $489million. Another "little giant" of China's chemical industry has fallen into the hands of multinational companies

on December 6, French fine chemical giant Rhodia group announced that it would invest 489million US dollars to acquire all the equity of private enterprise Feixiang chemical (Zhangjiagang) Co., Ltd. (hereinafter referred to as Feixiang)

Feifei is the leader of surfactant products in China, accounting for more than 70% of the domestic market share; Globally, its surfactant production is also second only to AkzoNobel, a multinational chemical giant, ranking second in the world. However, now it has become the bag of multinational giants

it is understood that surfactants are important raw materials for washing products for various purposes. At present, China and India are the largest consumer markets of surfactants in Asia. In 2009, the total output of washing products in China was 7.812 million tons, with a year-on-year increase of 9.87%. Among them, the output of synthetic detergent was 6.9287 million tons, with a year-on-year increase of 9.31%

"this acquisition is an important step for Rhodia to implement its profitable growth strategy. Through integration and flying, Rhodia will significantly improve its leading position in the surfactant business. After the acquisition, the sales of Rhodia Asia will account for one third of the world." On the same day, Jean Pierre clamadieu, CEO of Rhodia global, said

Rhodia acquired

489million US dollars! This is also a "big deal" in the global fine chemical industry

according to the information disclosed by Rhodia, US $489million is equivalent to about 9 times of the EBITDA (profit before interest, tax, depreciation and amortization) of Feixiang in 2010, and Feixiang group, the former shareholder of Feixiang, has obtained a very good income

it is understood that Feixiang is the flagship of the surfactant field under Feixiang group. Founded in 1970, its main products are cationic surfactants and aliphatic amines. Because Feifei's product certification system and enterprise management specifications are more in line with the requirements of downstream customers such as P & G, Feifei's sales have increased by more than 20% annually in the past five years, and the current annual sales have reached about 3 billion yuan

"cationic surfactants and aliphatic amines are the product lines that Rhodia lacks. Through this acquisition, Rhodia can provide more and better solution services for downstream customers. Therefore, our acquisition has been recognized and supported by downstream customers such as P & G", clamadieu bluntly said

according to the agreement reached between flying group and Rhodia, this merger and acquisition will be carried out in two steps: in 2010, Rhodia will first acquire 87.5% of flying equity held by flying group, and then acquire the remaining 12.5% from flying group two years later. "This is mainly for the smooth connection of mergers and acquisitions, and the effective rectification and existence of the original shareholders, which will ensure the smooth progress of some projects under construction and to be built in Feifei." Zhu Mingyue, President of Rhodia Greater China, explained

with the end of the acquisition, Rhodia plans to further expand its investment in Feixiang in the next five years to double its production capacity

"this shows that Rhodia will build multiple surfactant product lines including anionic and non-ionic products for new Feixiang, otherwise Feixiang now has a 70% market share of cationic surfactants. What are you doing to expand production capacity?" Chen Qisun, a chemical market expert and general manager of Beijing yingshida Information Technology Co., Ltd., said

clamadieu agreed with this statement, but he did not disclose the direction of capacity expansion

limited development space

in fact, at the beginning of the exposure of this M & A case, the industry expressed concern about the motivation of flying group to sell flying. After all, this is the only case of Bain Capital's investment in the chemical industry. Does flying sale represent a trend

when Shi Jiangang, the former chairman of Feifei, took over Feifei in 1993, it was an enterprise on the verge of bankruptcy. Under the leadership of Shi Jiangang, Flying captured the vice president of PolyOne Asia, Barto Duplessis said: "In the face of increasingly stringent regulations and standards, the global chemical industry has transferred to China, integrated into the international market, and began to provide surfactant products needed by major customers such as P & G.

in 2004, Shi Jiangang established the flying group on the basis of flying and began to plan for related diversified development. However, due to time constraints and other reasons, flying is still the most important source of profit for flying group. In a sense, flying is flying Shi Jiangang and other "biological sons" of the former shareholders of Feixiang group

"even if it is not sold, Feixiang will achieve a growth rate of more than 20% in the next few years." Said Li Ji, the former CEO of AVIC

however, Feixiang group finally chose to transfer Feixiang to Rhodia

according to Li Ji, in recent years, on the premise that the domestic market share has reached 70%, Feifei executives have also envisaged setting up production bases in the United States and other places to strive for greater space for Feifei's future development. However, due to cultural background, cost, environmental protection and other factors, the efforts of flying executives mostly ended in failure

"foreign enterprises are not unable to produce surfactants, and their technical threshold is not high. However, due to the pressure of cost and environmental protection, multinational companies shifted the production base of surfactants to China in the 1990s, and Feifei became the biggest beneficiary. But when Feifei wants to go abroad, it will definitely encounter the constraints of sales network, corporate culture and other factors." Chen Qixun said

according to Chen Qixun, at the beginning of multinational giants supporting domestic chemical enterprises such as Feifei, they set a clear path and development space for the development of these enterprises. People are clear about the cost and other factors of Chinese enterprises. First, polyvinyl alcohol is an organic compound, and the pricing often leaves only about 10% of the profit space for Chinese enterprises; Therefore, Chinese enterprises can only win by quantity. Feixiang has 70% of the market. How much space does it have

"if you don't agree, multinational giants will immediately look for new support objects." Chen Qixun said helplessly

Li Ji and others also considered product upgrading and business transformation. However, due to factors such as the original R & D team of Feifei is too small and the R & D cycle is too long, they finally chose to give up, "we only have more than 30 people doing R & D, but the R & D team of Rhodia is a model of hundreds of thousands of people"

"after the acquisition of Feifei, it can use our worldwide sales network and R & D team to achieve better development." Zhu Mingyue said

according to Li Ji, with the completion of the acquisition, Feixiang group will use the funds obtained from the sale of Feixiang to develop new materials and other industries, so that Feixiang group will change from a former raw material manufacturer to a new material supplier. At present, Feixiang group has set up two new enterprises in Suzhou and Hengshui, Hebei, to produce and sell polyurethane products such as high-performance STT resin

to provide mechanical and technical support

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