Merger and acquisition for ten years, TCL coveted the Internet transformation overtaking

foreign acquisitions

"In the past two years, I have personally asked 10 overseas mergers and acquisitions." "November 28, TCL chairman Li in an interview with the 21st century Economic report, said that although there is no final announcement of the major projects, but TCL's foreign mergers and acquisitions on the negotiations have been uninterrupted.

It is now 10 years since Tcl started two major acquisitions of Thomson and Alcatel's mobile phone business. Li originally "18 months profit" the Pride ringing. However, it was followed by Tcl's notoriously integrated bitter tour of two projects, until it dragged the company into a huge deficit. Li had to lead the TCL group into a "rebirth of the Eagle" survival self-help.

Ten years of node, back to see Tcl's two major mergers and acquisitions, the results can be defeated after the first win.

"If I had to choose again, I would still be a merger." Li said, Tcl Dare to launch huaxing photoelectric, as well as the current mobile phone business in the international market Gongchenglvede, are inseparable from a decade ago mergers and acquisitions.

Li said there is still a gap between TCL and the world's leading peers, but the gap is narrowing, especially in the context of a strategic transition to the Internet, with greater catch-up opportunities.

"Smashed two bowls and three plates."

Tcl's two major acquisitions 10 years ago were that Chinese companies did not have much insight into the existence of American and European markets. Prior to that, the so-called internationalization of Chinese companies was either limited to emerging markets or simply international trade with commodity exports.

TCL acquired Thomson's global color TV business in January 2004, when Tcl continued to acquire the Alcatel mobile phone business in August.

"Our vision is to quickly increase market share and scale through supply chain integration," he said. Li to reporters, but because the market situation changes too fast and unprepared, these two projects have encountered great difficulties in the early stages. Later, the target of 18 months ' profit was not realized, and the cash injected by the shareholders was soon burnt out, and Tcl had to reorganize the acquisition project again.

TCL Multimedia CEO Shanyi said 2006 is the most painful time for TCL internationalization. Shanyi, a Li Special assistant, recalled that one day, after receiving a phone call for restructuring spending that was much more than expected, the suave Li, who had "smashed two bowls and three plates" on the spot in a Beijing restaurant.

Internationalization needs courage and innovation. Li to reporters that cross-border mergers and acquisitions is an opportunity event, Chinese companies in this expansion, but also should reverse learning.

As for the lessons of TCL's two cross-border mergers and acquisitions, Li said, first, internationalization, especially in the process of mergers and acquisitions, must resist the temptation, "almost reached an agreement, Thomson suddenly notice that there is a big gap between the performance and the budget, but I still cannot resist the world's top three temptation"; Be fully prepared for the difficulties that may be encountered, "the thought of the difficulties will occur, many do not think of the difficulties will occur, such as TCL initially in the financing can consider equity financing, rather than performance as the confidence of the syndicated loans; third, the talent reserves should be greater; four, mergers and acquisitions in the product and market transition period, Will magnify the risk; five, to thoroughly grasp the laws and regulations of the relevant countries and unspoken rules, tcl in the European market at this point to eat a big loss, want to cut the people can not cut off.

Alcatel's patents are valuable.

Li said Tcl because of cross-border mergers and acquisitions in 2005, 2006 huge losses, bear great pressure, but he stressed that the Chinese market has been internationalized, so internationalization will also be the only way for Chinese enterprises.

The process of mergers and acquisitions is painful, but Li also does not admit that this is two failed mergers and acquisitions, but "win first".

"The TCL mobile phone is the only surviving one of the 13 companies that won a domestic handset license." Li to reporters, Tcl in the Alcatel mobile phone business after two restructuring, the original channels and customers have been retained, research and development capacity of most of the transfer to Shanghai.

In particular, the Alcatel-phone patent was then proved to be of great value to TCL's mobile phone business. TCL Senior Vice President, TCL Communications CEO Guo Eping reporters, through the Alcatel mobile phone business mergers and acquisitions, TCL Communications from 2009 onwards, in the past five years, sales revenue and market capitalisation has increased by almost 10 times times, net assets from the original 700 million or 800 million yuan to more than 3 billion yuan.

In the embodiment of international level indicators, TCL Communications has been in 170 countries to achieve sales, more than 85% of the income from overseas, at the same time, English has become the company's working language, 20% of the staff is sea foreign, 80% of the staff can communicate in English.

"Today, our mobile phone business in the domestic market has not slowed recovered, but the overseas business has played a new world." Li said it would be hard to imagine, without the original acquisition of Alcatel's handset business, that patents and technology, in particular, would remain an important fulcrum for the internationalization of TCL communications until today.

Li also said that the acquisition of Thomson Color TV business not only makes TCL the largest color TV company in China, but also successfully enters the European and American markets with very high barriers. Moreover, the acquisition of its own color TV sales scale, but also for TCL into the LCD panel business vertical integration provides a foundation.

2009 TCL TV's overseas business return to profitability, Li in 2010 to invest in huaxing photoelectric. "If there is no cross-border mergers and acquisitions, it is impossible to have this determination." Li said, the scale let Tcl in the industry chain ability to build more open.

At present, TCL Color TV and mobile phone business has been ranked in the world's fourth and sixth place respectively.

The new battlefield of Internet transformation

For TCL in the past decade no large-scale mergers and acquisitions project questioning, Li said that at present the entire industry is in transition, foreign acquisitions are not so many things, "is willing to give you something to be particularly careful, some we have to look up the project, despite the opportunity, but we will be very serious assessment."

"We will continue to push our internationalization. Li told reporters that this year's domestic market due to macroeconomic slowdown and subsidies policy withdrawal and other factors, basically flat, growth mainly from overseas, "the future of TCL Development is a two-wheeled drive, Tcl is considering the" double + "transition strategy to build up the ability to quickly expand to overseas markets."

The so-called "double +" transformation refers to Tcl in the February 25 this year to face the internet era of the transition strategy, namely "intelligent + Internet" and "Product + service", its core is to introduce internet thinking, to build a new business model, and hope to achieve in 5 years from the product and service profits accounted for 50% of the target.

Li said that over the past six months, Tcl's transition project in accordance with the "mature one, the introduction of a" strategy, constantly landing. Among them, the formation of O2O platform has entered the real stage, and Cisco joint-venture Cloud computing company has been formally established.

"The Internet is a whole new game. "Shanyi to reporters, Tcl accumulated" double + "resources and capabilities, have the opportunity to lead the global counterparts, especially the opportunity to lead with foreign partners further in-depth cooperation.

Shanyi that, if the color TV industry or in accordance with the original ecological model in the walk, and Japan and South Korea giants fight, very hard, especially in the absence of policy protection of the international market is so, and use the Internet thinking dozen overseas markets, have the opportunity to overtake in the corner.