In recent days, Silicon Valley myths and “mergers and acquisitions†Cisco announced that it has laid off 6,500 people worldwide. How can companies that are keen to merge and find their own sustainable development model after mergers and acquisitions? The discussion of the operation of mergers and acquisitions and related business models is not just a topic for foreign companies, because in recent years there have been a few overseas mergers and acquisitions by large Chinese companies, and the degree of concern is very high. One of the most interesting issues in recent days is Lenovo’s acquisition of NEC.
At the beginning of this century, when mainland Chinese enterprises began to cross-border mergers and acquisitions of Japanese companies, they still needed assistance from foreign companies to complete the process. However, ten years later, the degree of internationalization of Chinese companies has improved, and not only has the number of Japanese M&As been topped out, it has also become more and more mature. Through cross-border mergers and acquisitions, Chinese companies have entered a phase of groping for new models of Chinese business operations and development.
Maturity M&A Tips This year's Lenovo Group can be described as a happy event. In May, Chairman Liu Chuanzhi of Lenovo Group announced that Lenovo Group has successfully acquired IBM’s PC department for 6 years. It is based on a series of record-breaking news from Lenovo Group in fiscal 2010. This success has enhanced the confidence of Lenovo Group. In July, Lenovo Group announced that it has acquired the PC business of Japan’s largest PC company NEC.
Lenovo Group's case of IBM's mergers and acquisitions has long been criticized. However, this time the acquisition of NEC is not as green as it was then, but it is full of fire and is very sophisticated. Although the post-merger integration is still in the initial stage, we do not know whether it will take six years to judge whether the merger was successful. However, Lenovo Group is commendable for this merger and acquisition method, and it also adopted this method. We also saw possible future development of Lenovo Group.
Basically, the Chinese media used the headline of Lenovo's merger and acquisition of NEC. However, Japan's report did not find such a title. Japanese reports are headlined by Lenovo and NEC. The reason for such different reports is that this time Lenovo Group’s merger and acquisition of NEC’s PC business did not use the direct merger method of how much money was directly purchased, how much equity was bought, or how much capital was injected into the private placement, but it was used in conjunction with NEC. Established a holding company and put the NEC's PC business into practice. In this way, the face of NEC is fully met, the difficulty of mergers and acquisitions is reduced, and at the same time it paves the way for Lenovo to integrate its PC business in Japan.
According to the published information, NEC Legend Japan Group, which was jointly established by Lenovo Group and NEC, consists of a holding company and two entities. Among the holding companies, Legend Group holds 51% of the shares, and the remaining 49% is held by NEC. This distribution of equity shows that Lenovo Group is the actual controller. Lenovo Japan Inc. and NEC Personal Computer Inc., two entities that belong to Lenovo Group and NEC, have all entered the holding company and become wholly owned subsidiaries of NEC Legend Holdings. Lenovo Japan is actually a sales subsidiary of Lenovo Group in Japan. NEC Personal Computer is a new company separated from NEC by the personal computer division of NEC. It is actually the PC department of NEC. In other words, through the establishment of a joint venture holding company, NEC has divested the PC division to Lenovo.
We said that Lenovo's sophisticated experience is experienced in this place. How much equity will be acquired directly at what cost will be the face of Japan's largest PC company, and it will also result in the loss of customers just as it did when it bought IBM's PC business. At a press conference in which both Lenovo and NEC announced the establishment of a joint venture to establish a holding company, NEC cautiously denied the sale of PC assets to Lenovo Group, and NEC’s computer brand will remain under the joint venture holding company. This comprehensive approach does not affect Lenovo's control of NEC's PC business, and it does not affect the original marketing of NEC PC.
At the same time, Lenovo Group also has a wholly-owned subsidiary in Japan and competes with NEC's PC business. If Lenovo Group becomes a major shareholder of NEC Personal Computer Corporation, it will be extremely difficult to deal with the relationship with Lenovo's Japanese companies. The two companies are peers and have influential brands, respectively. If Lenovo's acquisition of NEC personal computer company does not integrate with Lenovo Japan, it means that Lenovo has two competing subsidiaries in Japan. This competitive relationship will bring difficulties to the development of Lenovo Group's PC business in Japan in the future. While putting these two peer companies into the holding company, there is a guarantee for continuous development under the overall planning of a company. The two industrial companies will share strategic resources under the unified planning of the holding company, conduct business exchanges, and use their respective strengths to jointly lock the 30% share of the Japanese PC market.
Lenovo's "Sword of Sword" or the cloud front, Lenovo Group once ranked among the top three PC companies in the world after it acquired IBM's PC business, but soon lost the crown. Therefore, everybody thinks Lenovo Group will regain the throne of the third place in the world market share by taking the opportunity of acquiring the NEC PC business. This view is not unreasonable. Now, the PC market is undoubtedly a market that emphasizes the advantage of scale. The size of the scale also means the strength of competitiveness.
However, depending on the scale of production, it means that the technical content is not high. As a giant in China's IT industry, Lenovo cannot always pursue products with low technological content. Therefore, I believe that Lenovo's plans are not just that. Because the acquisition of NEC's PC business actually can not get much of the core technology, NEC as an old Japanese IT company, with many Chinese companies can not yet reach the R & D and production technology, it is more concerned about the Lenovo Group.
In that year, after IBM dropped the PC business to Lenovo Group, it concentrated its business resources on IT services and its business was booming. The Lenovo Group can only look at the back of IBM's demise, but it cannot replicate IBM's latest strategy, but can only slowly and difficultly integrate the huge PC business. However, to this day, Lenovo has successfully integrated IBM's legacy. They should sum up their experiences and lessons. When faced with the integration of NEC, which is the premier IT field in Japan, they should have more demand and better performance. Methods.
Japanese media have realized that the cooperation between Lenovo Group and NEC may not be limited to PCs alone, and may involve IT services. In fact, NEC has already seen China's ultra-large-scale customer base owned by Lenovo Group. These are the salivations of the world's IT giants. In particular, NEC has a strong desire for cooperation in the cloud services that are currently surging, and Lenovo Group also has a strong willingness to cooperate. In fact, Yang Yuanqing, CEO of Lenovo Group, has already emphasized that the future strategic cooperation between Lenovo and NEC will also expand into the business areas outside the PC.
Lenovo Group is developing cloud computing technology. However, currently there is no real cloud computing service platform in China's market. China needs to build and operate a series of specialized cloud service platforms as soon as possible. Lenovo Group has long been aware of this, is seizing this input. In March this year, Lenovo Group and Shanghai Oriental Media jointly established Shanghai Vision Cloud Network Technology Co., Ltd., hoping to support more powerful and convenient "cross-screen" services through strong "cloud computing" support. Coincidentally, the ratio of joint ventures between Lenovo and Oriental Media is the same as that of Lenovo and NEC, which is also 51:49. Only in this joint venture, Lenovo’s shareholding is 49%, which means that the company’s dominance is not in the hands of Lenovo.
Lenovo needs to rapidly improve its cloud computing technology and cooperate with NEC. It should be said that it has found a way to quickly improve its cloud computing capabilities.
NEC, which is gradually withdrawing from the PC business, has concentrated more business resources on IT services, and cloud service is also the main direction for them. NEC has accumulated rich experience in the construction and operation of cloud service platforms since it began to transform its internal network. In order to realize a management system that rapidly responds to international accounting standards, cuts TCO, and visualizes operations, they carried out business process reforms and IT system reforms, and built a large-scale internal cloud service that NEC Group can use for about 120,000 people. platform. NEC has relatively mature technologies and experience in cloud services. They can provide a complete cloud service platform by providing data centers, servers, OSs, middleware, and application software. Their mid-term goal is 100 billion yen in sales. NEC not only promotes the Japanese market, but also aims at the international market. They also plan to increase the proportion of 20% (2009) sales of cloud services in the international market to 50% (2017). In order to achieve this goal, NEC has already cooperated with China Neusoft Group, and Lenovo Group with a large corporate customer base should be a NEC partner.
In terms of cloud services, we can see that Lenovo Group and NEC have a strong desire to cooperate. However, what kind of approach will this kind of cooperation take? The model of cooperation between Lenovo Group and NEC in the PC field is likely to be copied to the cloud service field. Because this model is a fruitful M&A model that Japanese companies can easily accept. If this type of cooperation is really realized, Lenovo Group's acquisition of NEC's PC business by means of a joint venture holding company will once again show its excellence and foresight.
Mature mergers and acquisitions to promote new ways of cooperation For many Chinese companies, technology research and development capabilities are still weak, but Chinese companies have the world's most growth potential market. In the past, we could only hope to use the market for technology. With the strengthening of China’s economic strength, Chinese companies began to use the means of corporate mergers and acquisitions to get what they wanted. In response, Japanese companies have also begun to have a clear understanding. For Japanese companies, the Japanese domestic market has begun to shrink as the population has decreased, and in the international market, it has been difficult due to various factors such as cost. How to cooperate with Chinese companies is a question that many Japanese companies are considering. .
Some Japanese companies' operators told the author that in the future, Japanese companies will still want to use the strengths of Japanese companies, concentrate their resources on product R&D, and continue to develop world-leading products. This is the way for Japanese companies to survive. In contrast, Chinese companies have the conditions and the ability to pursue large-scale production. If Chinese and Japanese companies can combine their respective advantages, they will be able to truly build a strong competitive edge in the market. This may be a road for the development of Sino-Japanese companies in the future.
The author generally agrees with this view, but it is not enough to realize this kind of cooperation. The author believes that China-Japan cross-border mergers and acquisitions are an effective way to achieve such cooperation. At the same time, because Chinese companies have the dominance in such cross-border mergers and acquisitions, naturally there will be a new business model that needs to be improved. Lenovo Group's acquisition of NEC's PC business is exploring such a model.
Although Chinese companies have also made significant technological advances, the difference in the efficiency of technology has largely offset the achievements of technological progress. Some Chinese companies that have not been able to achieve continuous technological progress can only cut costs, and ultimately have to cut corners and cut down on materials, thus burying the market. Advantages, while some Japanese companies have been able to develop many new products, the cost has remained high, and they have only been able to excel in the market and have gradually been eliminated. Therefore, there is great complementarity between Chinese and Japanese companies, and there is also great willingness to cooperate. However, the cooperation between Chinese and Japanese companies was unsuccessful for a period of time. There are many reasons for this, but one of the basic reasons is that property ownership is divided and people are distracted. Chinese companies should take advantage of their existing economic strength and adopt cross-border mergers and acquisitions between China and Japan to solve these problems.
Cross-border mergers and acquisitions between China and Japan may bring a new business model. This brand-new business model is the cooperative way of Japanese companies' R&D and Chinese companies' mass production under the condition that ownership ownership is clear. This model may be the ideal mode of cooperation in the future. Chinese companies' mergers with Japan are actually promoting the continuous development of this cooperation model.
At the beginning of this century, when mainland Chinese enterprises began to cross-border mergers and acquisitions of Japanese companies, they still needed assistance from foreign companies to complete the process. However, ten years later, the degree of internationalization of Chinese companies has improved, and not only has the number of Japanese M&As been topped out, it has also become more and more mature. Through cross-border mergers and acquisitions, Chinese companies have entered a phase of groping for new models of Chinese business operations and development.
Maturity M&A Tips This year's Lenovo Group can be described as a happy event. In May, Chairman Liu Chuanzhi of Lenovo Group announced that Lenovo Group has successfully acquired IBM’s PC department for 6 years. It is based on a series of record-breaking news from Lenovo Group in fiscal 2010. This success has enhanced the confidence of Lenovo Group. In July, Lenovo Group announced that it has acquired the PC business of Japan’s largest PC company NEC.
Lenovo Group's case of IBM's mergers and acquisitions has long been criticized. However, this time the acquisition of NEC is not as green as it was then, but it is full of fire and is very sophisticated. Although the post-merger integration is still in the initial stage, we do not know whether it will take six years to judge whether the merger was successful. However, Lenovo Group is commendable for this merger and acquisition method, and it also adopted this method. We also saw possible future development of Lenovo Group.
Basically, the Chinese media used the headline of Lenovo's merger and acquisition of NEC. However, Japan's report did not find such a title. Japanese reports are headlined by Lenovo and NEC. The reason for such different reports is that this time Lenovo Group’s merger and acquisition of NEC’s PC business did not use the direct merger method of how much money was directly purchased, how much equity was bought, or how much capital was injected into the private placement, but it was used in conjunction with NEC. Established a holding company and put the NEC's PC business into practice. In this way, the face of NEC is fully met, the difficulty of mergers and acquisitions is reduced, and at the same time it paves the way for Lenovo to integrate its PC business in Japan.
According to the published information, NEC Legend Japan Group, which was jointly established by Lenovo Group and NEC, consists of a holding company and two entities. Among the holding companies, Legend Group holds 51% of the shares, and the remaining 49% is held by NEC. This distribution of equity shows that Lenovo Group is the actual controller. Lenovo Japan Inc. and NEC Personal Computer Inc., two entities that belong to Lenovo Group and NEC, have all entered the holding company and become wholly owned subsidiaries of NEC Legend Holdings. Lenovo Japan is actually a sales subsidiary of Lenovo Group in Japan. NEC Personal Computer is a new company separated from NEC by the personal computer division of NEC. It is actually the PC department of NEC. In other words, through the establishment of a joint venture holding company, NEC has divested the PC division to Lenovo.
We said that Lenovo's sophisticated experience is experienced in this place. How much equity will be acquired directly at what cost will be the face of Japan's largest PC company, and it will also result in the loss of customers just as it did when it bought IBM's PC business. At a press conference in which both Lenovo and NEC announced the establishment of a joint venture to establish a holding company, NEC cautiously denied the sale of PC assets to Lenovo Group, and NEC’s computer brand will remain under the joint venture holding company. This comprehensive approach does not affect Lenovo's control of NEC's PC business, and it does not affect the original marketing of NEC PC.
At the same time, Lenovo Group also has a wholly-owned subsidiary in Japan and competes with NEC's PC business. If Lenovo Group becomes a major shareholder of NEC Personal Computer Corporation, it will be extremely difficult to deal with the relationship with Lenovo's Japanese companies. The two companies are peers and have influential brands, respectively. If Lenovo's acquisition of NEC personal computer company does not integrate with Lenovo Japan, it means that Lenovo has two competing subsidiaries in Japan. This competitive relationship will bring difficulties to the development of Lenovo Group's PC business in Japan in the future. While putting these two peer companies into the holding company, there is a guarantee for continuous development under the overall planning of a company. The two industrial companies will share strategic resources under the unified planning of the holding company, conduct business exchanges, and use their respective strengths to jointly lock the 30% share of the Japanese PC market.
Lenovo's "Sword of Sword" or the cloud front, Lenovo Group once ranked among the top three PC companies in the world after it acquired IBM's PC business, but soon lost the crown. Therefore, everybody thinks Lenovo Group will regain the throne of the third place in the world market share by taking the opportunity of acquiring the NEC PC business. This view is not unreasonable. Now, the PC market is undoubtedly a market that emphasizes the advantage of scale. The size of the scale also means the strength of competitiveness.
However, depending on the scale of production, it means that the technical content is not high. As a giant in China's IT industry, Lenovo cannot always pursue products with low technological content. Therefore, I believe that Lenovo's plans are not just that. Because the acquisition of NEC's PC business actually can not get much of the core technology, NEC as an old Japanese IT company, with many Chinese companies can not yet reach the R & D and production technology, it is more concerned about the Lenovo Group.
In that year, after IBM dropped the PC business to Lenovo Group, it concentrated its business resources on IT services and its business was booming. The Lenovo Group can only look at the back of IBM's demise, but it cannot replicate IBM's latest strategy, but can only slowly and difficultly integrate the huge PC business. However, to this day, Lenovo has successfully integrated IBM's legacy. They should sum up their experiences and lessons. When faced with the integration of NEC, which is the premier IT field in Japan, they should have more demand and better performance. Methods.
Japanese media have realized that the cooperation between Lenovo Group and NEC may not be limited to PCs alone, and may involve IT services. In fact, NEC has already seen China's ultra-large-scale customer base owned by Lenovo Group. These are the salivations of the world's IT giants. In particular, NEC has a strong desire for cooperation in the cloud services that are currently surging, and Lenovo Group also has a strong willingness to cooperate. In fact, Yang Yuanqing, CEO of Lenovo Group, has already emphasized that the future strategic cooperation between Lenovo and NEC will also expand into the business areas outside the PC.
Lenovo Group is developing cloud computing technology. However, currently there is no real cloud computing service platform in China's market. China needs to build and operate a series of specialized cloud service platforms as soon as possible. Lenovo Group has long been aware of this, is seizing this input. In March this year, Lenovo Group and Shanghai Oriental Media jointly established Shanghai Vision Cloud Network Technology Co., Ltd., hoping to support more powerful and convenient "cross-screen" services through strong "cloud computing" support. Coincidentally, the ratio of joint ventures between Lenovo and Oriental Media is the same as that of Lenovo and NEC, which is also 51:49. Only in this joint venture, Lenovo’s shareholding is 49%, which means that the company’s dominance is not in the hands of Lenovo.
Lenovo needs to rapidly improve its cloud computing technology and cooperate with NEC. It should be said that it has found a way to quickly improve its cloud computing capabilities.
NEC, which is gradually withdrawing from the PC business, has concentrated more business resources on IT services, and cloud service is also the main direction for them. NEC has accumulated rich experience in the construction and operation of cloud service platforms since it began to transform its internal network. In order to realize a management system that rapidly responds to international accounting standards, cuts TCO, and visualizes operations, they carried out business process reforms and IT system reforms, and built a large-scale internal cloud service that NEC Group can use for about 120,000 people. platform. NEC has relatively mature technologies and experience in cloud services. They can provide a complete cloud service platform by providing data centers, servers, OSs, middleware, and application software. Their mid-term goal is 100 billion yen in sales. NEC not only promotes the Japanese market, but also aims at the international market. They also plan to increase the proportion of 20% (2009) sales of cloud services in the international market to 50% (2017). In order to achieve this goal, NEC has already cooperated with China Neusoft Group, and Lenovo Group with a large corporate customer base should be a NEC partner.
In terms of cloud services, we can see that Lenovo Group and NEC have a strong desire to cooperate. However, what kind of approach will this kind of cooperation take? The model of cooperation between Lenovo Group and NEC in the PC field is likely to be copied to the cloud service field. Because this model is a fruitful M&A model that Japanese companies can easily accept. If this type of cooperation is really realized, Lenovo Group's acquisition of NEC's PC business by means of a joint venture holding company will once again show its excellence and foresight.
Mature mergers and acquisitions to promote new ways of cooperation For many Chinese companies, technology research and development capabilities are still weak, but Chinese companies have the world's most growth potential market. In the past, we could only hope to use the market for technology. With the strengthening of China’s economic strength, Chinese companies began to use the means of corporate mergers and acquisitions to get what they wanted. In response, Japanese companies have also begun to have a clear understanding. For Japanese companies, the Japanese domestic market has begun to shrink as the population has decreased, and in the international market, it has been difficult due to various factors such as cost. How to cooperate with Chinese companies is a question that many Japanese companies are considering. .
Some Japanese companies' operators told the author that in the future, Japanese companies will still want to use the strengths of Japanese companies, concentrate their resources on product R&D, and continue to develop world-leading products. This is the way for Japanese companies to survive. In contrast, Chinese companies have the conditions and the ability to pursue large-scale production. If Chinese and Japanese companies can combine their respective advantages, they will be able to truly build a strong competitive edge in the market. This may be a road for the development of Sino-Japanese companies in the future.
The author generally agrees with this view, but it is not enough to realize this kind of cooperation. The author believes that China-Japan cross-border mergers and acquisitions are an effective way to achieve such cooperation. At the same time, because Chinese companies have the dominance in such cross-border mergers and acquisitions, naturally there will be a new business model that needs to be improved. Lenovo Group's acquisition of NEC's PC business is exploring such a model.
Although Chinese companies have also made significant technological advances, the difference in the efficiency of technology has largely offset the achievements of technological progress. Some Chinese companies that have not been able to achieve continuous technological progress can only cut costs, and ultimately have to cut corners and cut down on materials, thus burying the market. Advantages, while some Japanese companies have been able to develop many new products, the cost has remained high, and they have only been able to excel in the market and have gradually been eliminated. Therefore, there is great complementarity between Chinese and Japanese companies, and there is also great willingness to cooperate. However, the cooperation between Chinese and Japanese companies was unsuccessful for a period of time. There are many reasons for this, but one of the basic reasons is that property ownership is divided and people are distracted. Chinese companies should take advantage of their existing economic strength and adopt cross-border mergers and acquisitions between China and Japan to solve these problems.
Cross-border mergers and acquisitions between China and Japan may bring a new business model. This brand-new business model is the cooperative way of Japanese companies' R&D and Chinese companies' mass production under the condition that ownership ownership is clear. This model may be the ideal mode of cooperation in the future. Chinese companies' mergers with Japan are actually promoting the continuous development of this cooperation model.
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