Kodak Company of the United States acquired all domestic photosensitive material manufacturers in China except Le Kai through the "98 M&A Agreement" measures, but Kodak Company did not stop there. In order to gain an absolute advantage in the photosensitive material market in China, Kodak Company clearly put forward a strong desire to cooperate with Le Kai after the "98 M&A Agreement". From the standpoint of joint venture, Le Kai put forward three conditions: to retain the Beijing School in Le Kai, to control Le Kai, and to have the right to operate and manage. Le Kai's request conflicts with Kodak's principle of establishing joint ventures overseas. In China market, Kodak met two powerful competitors, Le Kai and Fuji. Due to the resistance of China citizens to support the national crystal brand awareness and the strong competition of Fuji Company, Kodak's desire to monopolize the film market in China has been delayed. So the film market in China has formed a "three-legged" situation. For Kodak in the United States and Fuji in Japan, it is clear to them that whoever can unite with Le Kai first can seize the opportunity in the film market in China.
Le Kai Group was founded in 1950s. After decades of ups and downs, Le Kai has become the representative of national brands in China film industry. 1995 In the low-price competition between Kodak and Fuji, Le Kai's market share once declined. 1998 after the Asian financial crisis, the photosensitive materials industry in China was all depressed. Facing the aggressive market offensive of multinational companies, Le Kai Group has fallen into a serious survival crisis. Compared with Kodak and Fuji, Le Kai's technology is quite backward, while Le Kai has been unable to make a difference in high-sensitivity materials. In the film market, Le Kai's flagship products are mainly traditional products and low-end products, while high-end products are almost blank. After China's entry into WTO, the competition in the film market has become increasingly fierce. Due to technical, management, capital and other reasons, Le Kai Group's economic benefits have seriously declined, and even faced a loss situation. In order to get rid of difficulties and improve competitiveness, Le Kai began to consider becoming a joint venture partner in the second year of the new century. This is Kodak's strategy to dominate the China market. Therefore, it is easier for both parties to reach a cooperation agreement.
On June 29th, 2003, Le Kai Group, representing the national brand of China film industry, signed a 20-year cooperation agreement with Kodak Company of the United States. According to the agreement, Kodak will pay US$ 45 million in cash to provide a photographic emulsion production line and related production technology for color products, and provide US$ 29.5 million in financial support and technical support to upgrade the technical quality of Le Kai Film Group's two existing TAC production lines and related businesses in China, thus obtaining a 20% stake in Le Kai Film Co., Ltd. held by Le Kai Film Group in China. Le Kai Film Co., Ltd. will pay Kodak royalties for certain technologies and pay dividends for Kodak's shares. In the agreement, Kodak promised not to absorb the circulating shares in the market, and Le Kai Film Co., Ltd. will continue to produce and sell Le Kai net brand products. In this way, Le Kai Group's three principles of "keeping Le Kai Crystal brand, Le Kai holding and having the right to operate and manage" have been fully reflected. Up to now, Kodak has occupied more than 50% of the photosensitive material market in China. Thus, Kodak has an absolute dominant position in the photosensitive material market in China. Through two mergers and acquisitions, Kodak has almost all the photosensitive materials enterprises in China and expanded its share in the China market; Especially in the competition with Fuji Company of Japan, it occupies a favorable position and strengthens its competitive advantage in the world photosensitive material market.