Editor? /? Zhang? south
Design? /? Du? triumphant
Title map? /? Wheeler language
In the face of the transformation of automobile industry combining electrification and intelligence, automobile supply chain enterprises have adopted different coping strategies. These strategies can be roughly divided into three types: transformation, demolition and merger.
"Turn" means business transformation. The most typical example is that ZF announced on August 3rd that it will no longer research and develop components for the transmission system of internal combustion engines from 202 1 1, and the development focus of the group will be on long-range hybrid and pure electric vehicles.
"Dismantling" means splitting the business. 20 17 12, Delphi split the company into two parts, and the electronic, security, electronic and electrical architecture and other business sectors formed the new company Amber, focusing on accelerating the promotion of technologies such as active safety, autonomous driving and interconnection. The powertrain business segment is independent of the new company Delphi Technology.
20 18 10, Honeywell split its turbocharging business into a new company, Garrett. Previously, johnson controls split the Amdo and Seat businesses, Autoliv split Weiner, and Virginia split the exterior decoration business. As early as 20 18, China announced the split of powertrain business, but it has not been completed yet.
On the contrary, "merger" is a merger between companies and enterprises. In recent years, ZF has acquired Trina Trina with US$ 65.438+0.35 billion, Infineon with US$ 9 billion, ZF with US$ 7 billion, Tenneco with US$ 5.4 billion, and the parts companies of Federal-Mogul, Hitachi and Honda have merged into the third largest parts supplier in Japan. Small and medium-sized mergers and acquisitions emerge one after another.
The biggest M&A case of auto parts industry in 2020/the latest case of KLOC-0/0 "merger" 10 2 came to an end-Borg Warner announced the completion of the acquisition of Delphi Technology, worth about 3.3 billion US dollars.
Delphi was once the largest auto parts company in the world, and Delphi Technology inherited the name of its former parent company. In contrast, Borgwarner is relatively low-key, and its popularity and influence seem to be less than Delphi's, so that when the acquisition case was first disclosed, it left the impression of "snake swallowing elephant".
In fact, according to the financial report data of 20 19, the global sales of Borg Warner is10/0/680,000 US dollars, and the global sales of Delphi Technology is 4.4 billion US dollars. The volume of Delphi Technology is less than half of that of Borg Warner, and it is145.68 million US dollars after the merger. In the ranking of global auto parts suppliers 100 in 2020 by American Automotive News, the two companies rank 25th and 5 1 respectively, and are expected to enter the top 15 after the merger.
The protagonist of this acquisition, Borgwarner, is an American company dedicated to power system solutions. Its products and technologies involve internal combustion engines, hybrid power, electric vehicles, transmission systems and four-wheel drive systems.
In the1990s, Borgwarner and Volkswagen Germany jointly developed DCT powershift. After that, Volkswagen introduced DSG (Volkswagen's DCT trade name) powershift, which together with TSI supercharged direct injection engine formed a "golden power combination" that swept the China automobile market, making an important contribution to Volkswagen's growth as the world's number one. In addition, the turbocharging in the golden power combination is also the strength of Borgwarner.
The history of the acquired Delphi technology is very short. Its parent company, Delphi, is the product of the split listing of 1999 GM parts business. At that time, it was the largest auto parts enterprise in the world, which could produce almost all auto parts from screws to engines. After that, Delphi went through bankruptcy protection, the second IPO, continued to divest its business and slim down, until it split in two again in February 20 17.
The news of the merger first flowed out at the end of 2020 1. The first reaction of the stock market was that Delphi's share price soared by more than 60%, while Borgwarner's share price fell by 7%.
The stock price changes of the two companies are worth pondering, which represents the decline of traditional cars in the current capital market and the changing trend of the automobile industry such as electrification and autonomous driving. The two companies after Delphi's spin-off just correspond to two directions: amber focuses on autonomous driving to represent the future, and Delphi's strength is the traditional automobile powertrain, which seems to represent the sunset industry.
If Delphi technology is really a sunset industry, why did Borg Warner pay $3.3 billion for it?
The strategic actions of Borgwarner in recent years show that the company has been actively preparing for industry changes. 20 15 acquired remy international for $950 million to acquire advanced motor technology. And buy Sevcon? 、Sevcon、？ Inc, Reinhardt? Exercise? System, AM? Racing, Romeo and other companies have strengthened their technical and product capabilities in the fields of power electronics, electronic control ECU, pure electric and hybrid drive solutions, power battery packs, battery management systems and so on.
Tan, vice president of Borgwarner and president of China, accepted an exclusive interview with auto business review before the acquisition, told the story behind the acquisition and answered many questions.
From his story, it can be seen that the direction of electrification and intelligence of automobiles is undoubtedly the knowledge of the industry. The difference is the speed and rhythm of change and the length of the transition period. This difference leads to different judgments and decisions made by different companies.
Enterprises that resolutely turn to electrification like ZF are radical reformists, while Borgwarner takes into account the three major power technologies of fuel vehicles, hybrid power and electrification, and gradually increases the proportion of electrification, which is more like a moderate gradualist.
In the reform of automobile supply chain, the gradualists hope to achieve the same final result as the reformists, but the judgment of the transition period is longer and the methods are less intense, which is carried out step by step. The acquisition of Delphi technology is a step by step for Borg Warner.
Which school will be closer to the process of market change and succeed? Time will give the final answer.
Coping Strategies: Balance and Flexibility?
The official evaluation of Borgwarner's acquisition is that Delphi Technology has leading power electronics technology, outstanding talents, mature production technology, perfect supply chain and huge customer base. The merged company will provide customers with a complete set of integrated and independent power electronic products (including high-voltage inverter, converter, vehicle charger and battery management system) and support services (including software, system integration and thermal management).
Tan told auto business review: "The road we are taking is called' Balanced Flexible Drive System' strategy. Our initial strategy was balance, and now we have joined Delphi. After the acquisition, this will become a balanced and very flexible strategy. "
How to understand "balance"? He explained that the essence of a car is mobile travel from point A to point B, which can be extended to a safe point A and an efficient and energy-saving point A to point B. Bogwarner's positioning is to provide the most effective, efficient, energy-saving and environmentally-friendly mobile travel from point A to point B for cars, whether it is hybrid, electric car or traditional internal combustion engine, whether it is manned or unmanned.
"If we stop investing in internal combustion engines, or even break them up and focus entirely on electrification, this is in line with Wall Street's expectations, but in practice, the risks are stormy." Tan takes the sales of new energy vehicles as an example. In 20 19, the domestic new energy vehicle sales accounted for 4.68% of the total vehicle sales. In the first seven months of this year, the cumulative sales of new energy vehicles decreased by 32% year-on-year, and decreased by 26% year-on-year in the first eight months. "If all our bets are on new energy sources, it is very likely that we will not survive and there is a great possibility of bankruptcy."
Conservatism, when it comes to the balance mentioned by the rising moon, may be annotated with this word. It has nothing to do with optimism or pessimism, but an analysis and judgment of the process of industry change.
How long will electrification be popularized? How long can automatic driving be realized? Every company's judgment is different, such as general CEO Mary? Bora (Mary? Barra) spoke her judgment in the interview program "David Rubinstein's Leadership Live" on Bloomberg TV in June: "The popularization of electric vehicles will take decades, and autonomous driving will be realized within five years".
About the popularity of electric vehicles, Borgwarner and Mary? Bora belongs to the same camp.
Borgwarner has long judged that the popularization of electric vehicles will take decades, which is reflected in its diametrically opposite decision with ZF. 20 14 put forward the "C-H-E" balance strategy: exerting strength in the fields of traditional internal combustion engine, hybrid power and pure electric power.
How to understand "flexibility"?
"After the acquisition of Delphi technology, our flexibility has been greatly enhanced. If we speed up the process, we will not fall behind, because we all have electric drive products completely, and we can cope regardless of market trends. " Tan said, "Even if electric vehicles start to advance by leaps and bounds in five years, we will have no problem. We are definitely at the forefront of electric drive. "
Why can Delphi technology bring so much flexibility to Borg Warner?
Acquisition value: from perfecting core components to optimizing business structure
The annual sales of Borg Warner jumped from $654.38+0 billion to about $654.38+0.5 billion, which is the simplest logic of this acquisition from the paper data.
However, if the increase comes from traditional fuel vehicle parts, it doesn't make much sense, because everyone knows that this is a shrinking market.
The greater value of the acquisition lies in two points: the complementarity of products and technologies of both parties, and the increase of trend business in electrification and other industries.
This is what Tan calls "flexibility". If the electrification process is faster than Borgwarner's original judgment, the electrification technology and products obtained through acquisition can accelerate the company's transformation.
In terms of complementarity, Delphi's products in the traditional fuel power system, such as engine fuel injection system, carbon canister, electronic control ECU and transmission controller, can be completely complementary to Borgwarner's turbocharger, exhaust gas recirculation valve, engine timing system, transmission and thermal management.
In terms of electrification increment, Delphi Technology has inverter, DC-DC converter, vehicle charger, electronic control system including software and hardware, and battery management system, which not only brings increment, but also supplements Borgwarner's electronic turbocharger, P2 hybrid module, high-pressure liquid heater, motor, transmission and battery pack.
Tan Yuesheng said: "Borgwarner already has motors and transmissions, plus Delphi's inverter and control system, which can form a complete electric drive system." This should be the core harvest of this acquisition.
Borgwarner's electric drive system is also accumulated bit by bit. I first developed the transmission for electric vehicles in 2008, and entered China on 20 15. "In the next four years, almost 70% or 80% of the electric vehicles developed by myself in China started using this transmission of Borgwarner. Although the volume is not large, the market share is very high because the sales volume of the whole electric vehicle is not large. "
After the acquisition of Remy, the company combined the transmission with Remy's motor to form a two-in-one electric drive system. "This system has been supplied to new energy vehicles such as Great Wall, Weimar and Ideality, and it is not convenient to disclose more supply relationships now." Tan said to him:
If the inverter and control system of Delphi technology are added, this electric drive system can evolve into a three-in-one system.
He stressed: "We are not the only company that provides three-in-one electric drive system, but only Borg Warner controls all three in its own hands, and its development, design and manufacturing capabilities are in its own hands and all have patents. We can form a most effective electric drive system. "
Due to the long cycle of the automobile industry, it is necessary to determine the supply relationship in advance, and the supplier's order, income, supply structure and customer structure will be clearly visible in the next few years.
Borgwarner's integrated EGR solution
In Borgwarner's supply in 2023, pure electric components account for 6%, hybrid power accounts for 30%, Delphi pure electric components account for 65,438+02%, and hybrid power accounts for 29%.
As can be seen from the supply structure, the acquisition of Delphi technology can significantly enhance Borgwarner's ability in the field of pure electricity.
Research institution HIS? Markit's forecast for the global market is that by 2023, pure electric vehicles will account for 8%, hybrid vehicles for 25% and traditional fuel vehicles for 67%. Comparing this data, it seems that the electrification ratio of the two traditional parts enterprises has exceeded the industry level.
The reason for comparing the data in 2023 is that this is the time point when the two companies are fully integrated, and the changes in revenue and profit of the new company are also visible to the naked eye.
"By 2023, we estimate that after complete integration, including the merger of some factories, there will be a synergistic effect of $654.38+$25 million per year, almost? The profit rate of 0.8%~0.9% has improved and it is immediate. " Tan Yuesheng revealed that auto business review.
Epidemic impact
"If we can provide 300 yuan parts for a traditional fuel vehicle before, then we can provide 360 yuan parts for an electric vehicle after the acquisition and integration." Aside from complicated financial statements and changes in business structure, Tan summed up the acquisition with the simplest metaphor: transformation, while increasing income by 20%.
This will continue to improve the profitability of Borg Warner, which has been among the best in the industry. 20 19 financial report shows that the adjusted profit margin of Borg Warner is 12. 1% (Delphi technology is 7.2%), which is twice the average profit margin of 100 before the industry.
On July 3rd, China Automotive and German management consulting firm Berylls? Strategy? Advisors) jointly released the "Double 100 Top" list of auto parts enterprises in 2020. According to Barrish's data, in 20 19, the income of the top auto suppliers in the world 100 increased by 4.3%, but their profitability continued to decline, with an average profit margin of only 6%.
The goal of Borgwarner is pure electric and hybrid high-pressure liquid heaters (HVCH).
These data are all before the epidemic. The Black Swan incident and COVID-19 epidemic in 2020 have brought great impact to the automobile industry, and all changes are possible. Borgwarner's decision to acquire Delphi Technology is based on the market environment before the outbreak. Now everything has changed. If a decision is made again, will Borgwarner still insist on the acquisition?
"There is no doubt that we will insist and accept it." Tan said to him:
"We expect that global car sales will drop by 20% this year, and we will drop by 65,438+06%, which will still be about 4% better than the whole market. China market is expected to decline by 8% ~ 10% for the whole year, and Borg Warner is definitely profitable in China. Assuming that 202 1 returns to normal, our turnover will increase by 40% and our profit will increase by 60%. " This is Borgwarner's analysis and judgment for this year and next, and the epidemic has not caused any broken bones to the company.
Tan admits that after the outbreak of the epidemic and the suspension of production, like other companies, Borgwarner also reduced its salary, but only for management. "CEO's salary reduction 15%, returning to CEO's management salary reduction 10%, other employees remain unchanged." This situation did not last long. In September, the market fully recovered, the company's management ended the salary cut and all employees raised their salaries.
Moreover, after the outbreak of the epidemic, Borgwarner had the opportunity to re-evaluate or even terminate the acquisition, but they made the acquisition as planned.
The reason is that Delphi Technology used a $500 million revolving credit tool at the end of March to resist the impact of the COVID-19 epidemic, but did not inform Borgwarner in advance and obtained approval. Borgwarner said that the move violated the terms of the agreement between the two parties and suspended the acquisition process.
"We will not terminate the acquisition for this matter, but we can take advantage of it. We renegotiated and reduced the purchase price by 5%. " Tan smiled and told the subtle game behind the incident and leaned back easily.
Because when he spoke, the acquisition of the world's largest auto parts in 2020 was no accident, and it has been successfully nailed.
This article comes from car home, the author of the car manufacturer, and does not represent car home's position.