Rival takeovers

Grammer goes to China, Prevent pulls out

grammer 1800×1200
In a safe pair of hands. Source: Pressebild Grammer.

The Chinese firm Ningbo Jifeng has completed its acquisition of a majority stake in car-parts supplier Grammer, the German company confirmed Thursday. Ningbo Jifeng now holds 74 percent of shares in the Bavarian company, just short of the threshold for a complete takeover.

Grammer also confirmed that the German-Bosnian firm Prevent has sold its stake in the company. Over the last year Ningbo Jifeng and the Hastor family, owners of Prevent, have competed for ownership of the seat manufacturer, with the Chinese firm ultimately proving successful. In recent years, Prevent has taken over a number of suppliers within the German automotive industry, and has earned a reputation for aggressive commercial tactics, in particular in a dispute with the Volkswagen Group.

In June, Ningbo Jifeng made an official offer of €60 ($69) per share, a bid valuing Grammer at €780 million. Since last year, the Chinese firm has held a 25 percent stake. It initially intended to increase this to 50 percent, but ultimately went for a larger holding.

The Hastor family’s plan to wrest control  of Grammer has ultimately been beaten by the deep pockets of the Chinese, whose high share offer made it impossible to carry out their original strategic plan. “As a family-run, medium-sized investment company we have to deploy our resources where we can have executive influence,” said a spokesperson. Commercial logic meant it no longer made sense to retain a stake in Grammer, he added.

Take the money and run

“Commercial logic” refers, first and foremost, to the profit to be had by selling the family’s holding in Grammer. Over the last two years, the Hastor family has taken a 20 percent stake, at a price considerably less than Ningbo Jifeng’s €60 offer. Prevent’s owners did not disclose the profit made on the sale, but industry sources suggest a figure greater than €10 million.

As recently as the beginning of June, the Hastor family indicated it planned a takeover bid for Grammer, but no concrete offer was ever forthcoming. To trump the Chinese offer, the Hastors might have had to offer close to €100 per share, valuing the supplier at almost €1 billion. Within the industry, it was felt this could exceed the Hastors’ capacities.

Within Grammer itself, there is satisfaction that the takeover battle has come to an end. The company’s management made clear all along that they favored the Chinese bid. In spite of ongoing controversy surrounding Chinese takeovers of German industrial firms, the German government made no objection to this bid, confirming it would not use its blocking powers.

Over the last year, the Hastor family’s aggressive strategy has run into difficulties on a number of fronts. Its attempted restructuring of kitchen-manufacturer Alno did not succeed, and the company declared bankruptcy last November. Its dispute with Volkswagen has led to the manufacturer looking to end all relationships with Prevent-owned companies. Earlier this year, Prevent took a controversial stake in the supplier Neue Halberg Guss, which is currently struggling for survival.

Stefan Menzel writes about the auto industry focusing on Volkswagen. To contact the author: menzel@handelsblatt.com

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