M& A: Chem China(BlueStar)-Elkem AS(Norway) CASe 3 China National Orkla Norway Sells BlueStar Group Co.(100% Ltd(non-listed) Elkem as Silicone, solar industry pecial metals and chemical Chem china Blackstone products (N orway, Iceland, 80%(Private Equity) Canada, China, Brazil, South 20 Africa Elkem Po? State-owned Assets Antitrust BlueStar-Elkem Supervision and issues, etc. Investment Co Administration td (HKG Sar) Commission-SASAC CESLELECTIVE-APRIL2016
CESL ELECTIVE - APRIL 2016 11 M & A: ChemChina(BlueStar) – Elkem AS (Norway) CASE 3 ChemChina 80% China National BlueStar Group Co. Ltd (non-listed) State-owned Assets Supervision and Administration Commission-SASAC 100% Elkem AS Silicone, solar industry, special metals and chemical products (Norway, Iceland, Canada, China, Brazil, South Africa Orkla Norway Sells Blackstone (Private Equity) 20% BlueStar-Elkem Investment Co Ltd (HKG SAR) Elkem IPO? Antitrust issues, etc. ?
M& A: Sany- Putzmeister Case 4 Share Private shareholders Family) Foundations deal Putzmeister (high-tec 570 me turnover. 3000 pumps)(medium-sized employees, bm E profits on sales of pumps 324me Sany Heavy Ind, 90% Citic PE Advisors, 10% Putzmeister has debts of 165m e and a credit-line of 400m e CESLELECTIVE-APRIL2016 12
CESL ELECTIVE - APRIL 2016 12 M & A: Sany- Putzmeister CASE 4 Private Shareholders (Family) Foundations Putzmeister (high-tec pumps) (medium-sized) Sany Heavy Ind., 90% Citic PE Advisors, 10% 570 m € turnover, 3000 employees, 6m € profits on sales of pumps Share deal ! Putzmeister has debts of 165m € and a credit-line of 400m €. 324m €
M & A: geely-VOlVO CASE 5 Ford s200m credit note -communication S 1.6 bn equity Acquisition Tea Antitrust? S 900m working c. -inform regulators pledges work force/standards Volvo 100%o ah.IP rights: Ford, Geely/Volvo Acquisition Finance Zhejiang Geely Holding-Geely(es 800m) Group Co Ltd .Daqing gmt Investment Private car maker vehicles. Bank of China. China Daqing state-owned firn Construction, ExIm Bank of (investment+ management China, foreign lenders state-owned assets) Foreign Status of volvo! CESLELECTIVE-APRIL2016 13
CESL ELECTIVE - APRIL 2016 13 M & A: Geely – Volvo CASE 5 Daqing state-owned firm (investment + management of state-owned assets) Zhejiang Geely Holding Group Co. Ltd. Private car maker ►Acquisition Team ▪communication ▪inform regulators ▪pledges work force/standards ▪IP rights: Ford, Geely/Volvo ►Acquisition Finance ▪Geely (≥ $ 800m) ▪Daqing gvmt. Investment vehicles, Bank of China, China Construction, ExIm Bank of China, foreign lenders ▪’Foreign Status’ of Volvo! Volvo 100% Ford $ 1.6 bn equity $ 200m credit note $ 900m working c. Antitrust?
Cf. also antitrust LEGAL RISK ASSESSMENT I Investment Controls >Investment Target- Form of Cooperation a Consider establishment of a European subsidiary cong-term contract without establishing a corporate body (consider research cooperation/exploring future joint activities - Consider Framework Contract as a prelude to a closer form of cooperation Joint Venture defines cooperation and lays down rules for activities usually in a body of corporate law Partnerships Limited Liability Companies Listed or non-listed corporations CESLELECTIVE-APRIL2016 14
CESL ELECTIVE - APRIL 2016 14 LEGAL RISK ASSESSMENT I ►Investment Target – Form of Cooperation ▪Consider establishment of a European subsidiary ▪Long-term contract without establishing a corporate body (consider research cooperation/exploring future joint activities) ▪Consider Framework Contract as a prelude to a closer form of cooperation ▪Joint Venture defines cooperation and lays down rules for activities usually in a body of corporate law ▪Partnerships ▪Limited Liability Companies ▪Listed or non-listed corporations Cf. also Antitrust – Investment Controls
Cf. also Preferential bank LEGAL RISK ASSESSMENT II Loans and WTO concerns Chinese regulatory Approvals for Outbound Investments National Development Commission (NDRC) Filing requirements(provincial branch)<300m US S File with ndrc direct> 300m US S Approval for investments>1 bn Uss or sensitive countries or industries Approval by state Council >2 bn US S or sensitive countries or industries Cf provincial govmts. .MOFCOM: inter alia investment agreement/contract ' State Administration of Foreign Exchange(saFe) -Rules for State-owned Enterprises Shanghai Exchange/Natural Persons/Industry-specific CESLELECTIVE-APRIL2016 15
CESL ELECTIVE - APRIL 2016 15 LEGAL RISK ASSESSMENT II ►Chinese Regulatory Approvals for Outbound Investments ▪National Development Commission (NDRC) Filing requirements (provincial branch) < 300m US $ File with NDRC direct ≥ 300m US $ Approval for investments ≥ 1 bn US $ or sensitive countries or industries Approval by State Council ≥ 2 bn US $ or sensitive countries or industries ▪MOFCOM: inter alia investment agreement/contract ▪State Administration of Foreign Exchange (SAFE) ▪Rules for State-owned Enterprises ▪Shanghai Exchange/Natural Persons/Industry-specific Cf. also Preferential Bank Loans and WTO concerns Cf. provincial govmts