Chongqing Textile Group acquires global auto parts giant to develop auto parts market

Recently, Chongqing Light Textile Holdings (Group) Company held a press conference, announcing that after more than eight months of efforts, China Textile Group’s acquisition of Sagami Group in Germany finally completed the equity and asset delivery on June 6th, June 21. Japan completed the delivery of financial claims. So far, eight months of work, a total of 21 master agreements, 18 affiliate agreements, and 56 annexes have been signed. This was called by the world's leading law firms for complex acquisitions that have never been encountered in more than 20 years. Completed by a Chongqing company.

German company SAGU intensive company is a multinational enterprise group with 12 factories in 9 countries. It has total assets of more than 300 million euros and more than 4,300 employees. Its main product is automotive seals. Its sales revenue last year was 360 million euros. Ranked third in the world, first in Europe and South America. Its products are mainly used for supporting cars in Germany and the United States, and have established long-term and stable business cooperation relationships with such leading automotive OEMs as Volkswagen, BMW, Mercedes-Benz and Ford.

Due to the impact of the financial crisis, the Saguami Group’s capital chain broke, and its major production plants Saguchim and Sagami have filed for bankruptcy protection at the Saarland District Court in Germany on November 5 and 12, 2010. In accordance with the provisions of the German bankruptcy law, the bankruptcy assets are sold through global bidding and new investor mergers and acquisitions are sought.

At home, acquiring a bankrupt company is a very simple matter. At the moment when the bankruptcy was announced, the company’s assets were sealed up and the employees were also placed by the bankruptcy party. Due to the bankruptcy of the company, the purchase price would be sufficiently low. However, with this concept, the light textile group that participated in the acquisition of Sagami Group found that the idea of being popular at home is not going up in the international market. The same is bankruptcy, domestic companies are static after bankruptcy, assets are sealed, but foreign companies are bankrupt and domestic two concepts, after the company declared bankruptcy, it is still normal operation.

This is only a minor difficulty. In this acquisition, they faced not only Sagami Group, but also shareholders, six banks, and six OEM OEMs (ie, BMW, Ford and other automobile factories, which need these factories to recognize the maintenance after the acquisition. There are orders, or the acquisition of the plant is empty shell), 2 guilds to start negotiations. “The longest one has been negotiating from the afternoon of the first day to 7 am the next day. It is normal for a whole day to have a breakfast only when negotiating.” Zhang Wenqing said.

In the end, after arduous negotiations, both parties signed a huge agreement of 21 master agreements, 18 affiliate agreements, and 56 annexes.

When talking about why the acquisition of Sagami Group in Germany, Zhang Wenqing, President of Chongqing Light Textile Holdings (Group) Co., Ltd., said that “Sargeig Group is a multinational enterprise group in Germany and its sales revenue of more than 360 million euros per year is incorporated into the light. After that, Spinning Group will account for more than 30% of the operating revenue of China Textile Group. After the acquisition of Sagami Group, China Textile Group will have world-leading technology in the automotive seal industry and world-class customer resources. In one fell swoop from several hundred million to several billion.It is reported that China Textile Group will establish a production and R&D base in China that is no less than European headquarters, and will vigorously develop the non-automobile product development of Sagami Group.