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French company gets Supor green light

By Diao Ying (China Daily)
Updated: 2007-04-13 08:59

French company SEB has received government approval to acquire leading Chinese cookware maker Supor after a lengthy industry debate.

Shenzhen-listedZhejiangSupor Cookware said yesterday French home appliance maker SEB would take a majority stake of 52 to 61 percent after the deal was cleared by theMinistry of Commerce. The company must apply to theChina Securities Regulatory Commissionfor final approval.

SEB said previously the deal was worth around $300 million.

The ministry's decision brings to an end debate led by Supor's rivals, concerned about the creation of a foreignmonopolyin China's kitchenware industry.

It was one of many recent cases that have raised fears over the impact of foreign control on domestic industry security and protection of national brands.

Supor and SEB reached an agreement last August over the strategic investment. But the case was delayed by industry appeals.

Several domestic firms including ASD Electric Appliance Co Ltd and Double Happiness Cooker Electric Appliance Co said theacquisitionmay hurt China's cookware industry.

"The acquisition will start a cookware price war and damage the development of the industry," ASD said last year.

The Ministry of Commerce held a hearing on the matter before it granted approval on Monday after an investigation involving the industry association and companies.

Debates over foreign acquisitions have been raging across industries from manufacturing to food and beverages. The most recent is the case involving China's biggest beverage producer Wahaha. Its chairman Zeng Qinghou is aggressively opposing an acquisition by French food giant Danone.

USprivate equityfirm Carlyle has made several concessions in its acquisition bid for Xugong Group Construction Machinery Co Ltd. Its proposed stake has been cut from 85 percent to the current 45 percent and it is still waiting for approval.

Chen Meirong from Supor's rival ASD yesterday refused an interview request. Double Happiness said it had no comment.

According to Shao Qing, an analyst from Ping'an Securities, Supor will see its exports surge as the original equipment manufacturer (OEM) for SEB after the acquisition. Supor posted revenue of 20.7 million yuan in 2006, up 42 percent on the previous year. The domestic market accounted for close to 70 percent of its business.

Long-established SEB kept a low profile in China before the deal. "China is a market that we want to be a leader in. To do that, we need a platform," Vincent Tai, managing director of SEB's subsidiary inShanghaiwas quoted as saying in a previous report.

(China Daily 04/13/2007 page13)