SEB wins nod to buy controlling stake in Supor Cookware
SEB, the world's largest kitchen appliance maker, has received in principle approval from the Ministry of Commerce to take a controlling stake in Zhejiang Supor Cookware at a steep discount despite concerns that foreigners are buying mainland assets cheaply.
The deal, which includes share sales in three batches worth more than two billion yuan, will give the French group up to 61 per cent of Hangzhou-based Supor, which it cannot sell for three years.
It required the approval of the China Securities Regulatory Commission, Supor said.
Foreign firms have been suffering setbacks in buying into mainland firms amid rising concerns that the country's well-known brands are falling into foreign hands and some assets were sold too cheaply.
Zong Qinghou, chairman of beverage maker Hangzhou Wahaha Group, said this week he rejected Groupe Danone's planned acquisition because of concerns of foreign ownership.
Arcelor Mittal's plan to take a 38 per cent stake in Laiwu Steel was rejected by the National Development and Reform Commission last month.
US buyout fund Carlyle was forced to scale back to a minority stake its planned buyout of Xugong Group Construction Machinery. Sources said its proposed stake purchase in Chongqing City Commercial Bank had been rejected.
Supor's rivals such as Double Happiness and ASD had also threatened that they would ask Beijing to stop the deal.
Still, yesterday's approval will allow SEB to buy 25.3 million Supor shares from three existing shareholders and 40 million new shares at 18 yuan each. SEB can also buy between 48.6 million and 66.45 million shares at an unspecified date in the future. The purchase price represented a 46 per cent discount to Supor's closing of 33.53 yuan yesterday. The stock has gained 73 per cent this year.
'Supor Cookware will benefit from the technology, patent resources, and management experience SEB has, which will strengthen the competitive edge of Supor's products,' Zou Gao, an analyst at TX Investment Consulting, wrote in a report yesterday.