Acquisition of Philips LED project blocked Chinese cross-border mergers and acquisitions is the trend
On March 31, 2015, the Chinese and foreign syndicates led by GO Scale Capital of Jinshajiang and the Royal Philips of the Netherlands reached an agreement to acquire the 80.1% stake in Lumileds (LED and Automotive Lighting) under Royal Philips. In order to complete the delivery, the teams of the two sides have actively cooperated with the supervision of the US Foreign Investment Committee (CFIUS) and other regulatory authorities in the past year.
Recently, the two sides announced that they have decided to stop the transaction because they cannot resolve the concerns of the US Foreign Investment Committee regarding national security.
In this acquisition, Jinshajiang GO Scale Capital stands out among many international competitors through fair and open competition with its strong Chinese market strength and industrial base, strong financial strength and deep understanding of the semiconductor industry. Both parties believe that Lumileds' advanced technology, combined with the Chinese market and industrial base, Lumileds can be quickly upgraded to become a leading company in the industry, creating subversive glory in the world LED industry.
In the past year, in order to pass the CFIUS review, the two sides have always cooperated in good faith and actively responded. However, after nearly a year of adjustments, renewal plans, and divestiture of assets, the transaction ultimately failed to lift CFIUS's concerns about national security. Both sides expressed regret.
At present, China has a huge market and a good industrial base. If combined with advanced global technology, it will create opportunities for industrial upgrading. Cross-border mergers and acquisitions by Chinese companies will be the general trend. The suspension of the Lumileds project was not a termination of cooperation with Philips, and the syndicate led by GO Sands Capital is now actively participating in the acquisition of Philips Lighting Group.
Mr. Wu Shenjun, Chairman of Jinshajiang GO Scale Capital, pointed out that “in the process of cooperation with Philips, the two sides have established a sincere and mutual trust relationship and will continue to deepen cooperation with Philips. Through this transaction, Jinshajiang GO Scale Capital has accumulated a wealth of Experience. The Jinsha River and the Chinese-funded syndicate will spare no effort to continue to look for investment projects with core technologies and broad markets.
GO Scale Capital is grateful to China Investment Co., Ltd., Asia Pacific Resources Development and Investment Co., Ltd. and Nanchang Industrial Holding Group Co., Ltd. for their support from Chinese and foreign consortiums. Thanks to the Bank of China Syndicated Financing for this transaction, thank you for your support. This sincere assistance and trust in the past year. We firmly believe that through technological innovation and industrial upgrading, we can achieve world-class high-tech companies in China!"
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