Keywords: intellectual pu and semiconductor

On July 18, chip giant ARM goes to Japan's softbank spend 24.3 billion pounds, it is also a son's biggest acquisition since started softbank.

Softbank acquired ARM's bid for 17 pounds per share, represents a 43% premium over the ARM finished last week. Softbank, so high premium for ARM, only a starting point, that is the Internet of things, this is Mr. Son has repeatedly stressed the acquisition of reason. Although he did not disclose details related strategy, but it is a reason enough to make everything clear: aim at the core of the next era of technology and infrastructure to carry out the acquisition is softbank, age of the Internet of things moved nearly is softbank acquired ARM, layout, the biggest cause of IP chip architecture.

Similarly, at softbank acquired ARM before January, China's capital company built wide assets and intellectual capital has first resort, for $2.75 billion, won the international semiconductor giant en standard product of pu company chip business, which is China's semiconductor industry since this year the biggest overseas acquisition.

Is the same chip, is also big on an unprecedented scale, the industry mergers and acquisitions and behind all climax, the highlight is far-sighted enterprises at home and abroad aiming to forward-looking layout in the future.

But careful analysis, it can be seen that softbank still with China enterprise merger the two are quite different, first of all, China's semiconductor industry is still in grade development, basic layout is still need to improve; Second, with deep pockets of softbank global mergers and acquisitions, investment than for many times, the Chinese industry of overseas mergers and acquisitions is still in its infancy.

So, so, the factory and grace road capital acquisition boon wisdom of pu standard business chip, is worth thinking about, it not only has important significance to the development of China's semiconductor industry, at the same time, it can provide reference for Chinese capital of global mergers and acquisitions.

Revelation: one of the five standard is the basic condition of China's overseas m&a

Headquartered in the Netherlands, PSV eindhoven's wisdom pu is one of the world top ten semiconductor company, not only in the automotive semiconductor market, in the semiconductor industry market and are among the top seven. In 2015, grace wisdom pu standard product chip business income up to $1.24 billion, pre-tax profit of more than $200 million.

So why did grace wisdom pu willing to this "revenue cows" handing, wide to build assets and intellectual capital and how in his loom over bid can come to the fore, with the head "cow" into their circle of the stall?

Built wide asset investment committee chairman li has said that when choosing a takeover target, build wide assets are five harsh judgment standard: one is the industry status must be in the field of the world's top two, two is to grasp the core technology, 3 it is to reach twice the national average profit margins, four is to both the stability of the market, cash flow, and the future development space, five is to global layout.

These five criteria is like a sieve, ultimately selected are able to bring value to build assets, and even the domestic industry growth target, which is to build assets acquisition has won an important factor of landslide. Chip business standards of pu products are accorded with the standard, which is to build wide assets to its will.

Built wide asset management team of the international semiconductor industry and financial industry background, has laid a good foundation for the communication, become important to the success of a takeover. "Is not to win on the offer. In addition to the understanding of the industry, capital security, the follow-up for acquiring enterprise to provide value-added services, our greatest advantage is the ability to communicate and to be acquirers team." Talk about the secret of won, build assets, managing Sun Wei so said.

Is expected in the first quarter of next year to complete the acquisition, besides including intelligence pu standard chip products design, including its located in the UK and Germany two wafer manufacturing plants, as well as in China, Malaysia, the Philippines three testing plant, involving about 11000 employees.

Before the deal, back is build the strength of financial capital and cooperation institutions, such as building widely have assets to $1.8 billion, won the favor of pu and Julio cruz rf power business, the chip business and success to its standard products, means to build wide assets will grace wisdom in pu for automotive and industrial markets such as semiconductor leading technology into one by one at the same time, will also gains, along with all the dozens of production line of pu in the world and thousands of products, thus to fill a number of domestic blank, for the Chinese enterprises overseas acquisitions has set a new standard of success.

From which it is not hard to see the capital in the beginning, mergers and acquisitions by a tough first five standards, it is the core key for the success of this deal finally. Chinese enterprises overseas a lot of project bid, but there are many is money but did not achieve the ideal effect. Mark clear, specific goals, in a sense, the five standards of plant capital can become China's enterprises overseas acquisitions for reference of the basic conditions.

Revelation 2: semiconductor industry development direction would be to win more

There is no denying the fact that the semiconductor industry in China is still in grade development, basic layout is still need to improve, at the moment of China's semiconductor industry how to realize win-win through acquisitions and global industry?

For building wide capital, after grace wisdom pu rf power acquisition, to the next city, further will chip business into its standard products, either upstream or downstream will be conducive to long layout, achieve synergies, the formation of industrial cluster development, and is expected to become China's semiconductor industry is the largest and most profitable IDM enterprises.

Grace wisdom pu standard product chip business went to China, is undoubtedly a great blessing for the domestic semiconductor industry, means that the domestic semiconductor industry can quickly obtain the global core technology, and then drive the acceleration of Chinese domestic IC industry upgrade iteration, really catch up with the world advanced level.

For grace wisdom pu, this is willing to its standard products chip business the adjoining the revenue cows, mainly because of the need for strategic focus migration or. Intelligent application everywhere, everywhere security requirements and network connection of the ubiquitous global long-term trend, prompted Mr Pu cross the rubicon, and adjust the industrial strategy, will be the future development of center of gravity shifted to high power of mixed signal products business, to fit the "wisdom of life, safety link" strategic vision.

To accelerate the strategic deployment and focus of the business, building a high performance mixed signal the "power plants" of the industry, with a leaner and more efficient team, to focus on the business differentiation of high-growth, high interest rates, "pay and" grace wisdom pu only very reluctantly give up what one favours, shrinkage product line, abandon rf power, standard products, such as chip business, focus on the core of "safety, Internet connection" strategy.

At the same time, the sale of the business, also for grace wisdom pu strategic shift provides more abundant capital support, is conducive to accelerate its strategy to promote the pace.

So, in the long run, the acquisition of both construction capital, and China's semiconductor industry, grace and wisdom, is a win-win pattern. While China's semiconductor industry can also dance with global industry.

When China's integrated circuit industry further development, perhaps the next "softbank acquire ARM for" event will happen to Chinese companies.

Revelation 3: how to keep the sustainable development of the merger?

As China's economic strength strong rise, domestic enterprises mergers and acquisitions at sea is not new, however, more it is worth noting that the Chinese enterprises overseas mergers and acquisitions, in addition to build wide grace wisdom pu rf power to acquire the assets of the business of such success stories, standard products businesses, and spent a large amount of money, but only in one's hand of a management team, the outline of the core technology and the brain drain and worthless, or is already or will out of technologies and products in overseas markets.

Of course, will grace wisdom into standard products chip business, just build assets, the acquisition of the first step to success, as a PE investment, itself is not a lot of business administration talents reserves to build assets, how to manage acquisitions to five factories, how to carry out staff integration, how to retain existing customers and develop new markets, will be built assets the real challenges facing the next step.

In this regard, grace wisdom pu has been in China for more than 30 years development course pays attention to China's personnel training, is also a key element in this deal.

The last two years, grace wisdom pu very support "made in China 2025" and "Internet +" strategy, in the aspect of technology innovation of technology and products to the Chinese market localization services, in the smart Internet solutions, security vehicles, smart city and smart society almost every content security and connection area, almost all necessary figure of pu. Wisdom as pu with smic, huawei and datang telecom, domestic enterprises in-depth cooperation, pushing China's manufacturing industry to upgrade; Grace wisdom pu for haier, China's first intelligent household robots, millet smart home with iot solutions and a series of multilateral cooperation with Chinese enterprises to cross-border, cross-industry.

And, more importantly, in bringing the world's leading technology and solutions to Chinese at the same time, grace wisdom pu also actively seek through international exchanges, support local talent cultivation in China, participate in driving China's electronic information and talent cultivation project of the embedded system. This is grace wisdom of pu in China development strategy, give a person with fish, as teach them to fish. Wisdom as pu Zheng Li has been pushing for greater China President talent training plan, grace wisdom pu successively and the ministry of education signed a strategic cooperation agreement of colleges and universities, and joint laboratory set up 200, 150 universities for ten consecutive years co-sponsored the national college students' smart car competition.

It is conceivable that sell standard products business to build capital, grace wisdom pu will also further and build capital for personnel training, for capital out of the wafer factories, factory testing factory of China management team, this is also the key of sustained development after m&a.

Although grace wisdom pu and build capital has many basic plan, but after the merger integration still faces many challenges. Actually, not only is China's enterprises, it is also common challenges facing any global enterprises overseas mergers and acquisitions, to build wide assets so, softbank is no exception.

While in the context of the business logic, softbank, the big ARM, is a kind of a win-win situation, but also some variables, merger and acquisition of the final success or failure and gain and loss, also largely depends on the follow-up team with the integration of the market, the synergistic effect between the two sides play important next step.

【 summary 】

TCL group's chairman and chief executive, Mr Li had reviewed TCL ten years suffering and of internationalization, TCL and Thomson talk almost a deal at the end of 2003, "but I'm temptation impetuously, because after the acquisition will be the third industry, the temptation is very large. Now summarize, do business must comply with the laws of enterprise, and talk about two months, can get the good condition, resist the temptation to keep cool judgment, at any time it is TCL's lesson."

After more than ten years, today's global mergers and acquisitions by Chinese enterprises to go overseas, should be more careful, calm and bold, although the process of judgment and grasp is not easy, but it is to seek greater development is an important step in the Chinese enterprises must go, this is the only step to walk, to make "look good" the acquisition of real ground, have greater development.

Built wide assets overseas acquisition criteria and strategy, and long-term development plan after the merger, is worth seeking overseas mergers and acquisitions of Chinese enterprises pondering and reference. What's more, the merger and acquisition also occurred in China is in need of power after the world's advanced level of semiconductor industry, planning and layout of these need more power, more need to have a dance with the global semiconductor industry, the great pattern of multi-win-win situation.