Chongqing Department Store Staged A New Century Of "Snake Swallow Elephant"

In Shanghai, the integration of commercial state assets is in full swing, and Beijing and Chongqing have joined in succession.

After the establishment of the management framework of the central SASAC, the advantages of the integration of local commercial state assets are not only to solve the drawback of separation of assets ownership from personnel rights, but also to solve the problem of managing dragons to manage water in operation and management.

But in fact, the integration of commercial state assets not only involves collectivization and state-owned assets.

For several years, the Chongqing business group Chongqing.

As one of the state-owned group that Chongqing SASAC focuses on supporting and listing, the competition between Chongqing department store and Chongqing new century department store has attracted much attention. With the completion of this acquisition, this problem will be solved.

Long integrated road

Chongqing department store and new century department store.

In those days, the major shareholder of Chongqing department store, Huamao State-owned Assets Management Co., Ltd. and the two shareholder, Chongqing business group, were reorganized and merged under the leadership of Chongqing municipal government.

In December 21, 2005, the 18.96% stake in Chongqing department store held by Huamao state-owned assets management company was pferred to the business group. The shareholding of Chongqing department store held by the business group increased to 35.96% and became its largest shareholder.

At this time, the competition between the new century department store and the Chongqing department store which belonged to the wholly-owned subsidiary of Chongqing business group became the focus of the industry.

People in the industry describe this way: "the coincidence ratio of the two enterprises is as high as 90%, and many times the stores of the two enterprises are" door to door open ".

As a "parent", the Chongqing commercial company once promised to solve the problem of competition in the same industry within two years after the completion of equity pfer, through the replacement of assets and business or pfer of assets with Chongqing department stores, or by merger and absorption.

However, what disappointed investors was that in December 21, 2007, two years later, the industry was regarded as the deadline for Chongqing business group to solve the competition.

But the restructuring plan of Chongqing department store and new century department store did not come as scheduled.

In April 28, 2008, Chongqing commercial agency sold 25% of its new century department store.

It is understood that the pfer of new century department store equity, the assignee put forward a number of harsh requirements, such as the one-time payment of the pfer of shares of the total price, and promised to provide about 300 million yuan of additional funds to increase investment and expansion of the target enterprises; the pferee and its main shareholders should not operate the same business as the target enterprise, and must be a financial investor who optimizes and enhances the brand and value experience of the commercial circulation enterprise; the pferee or its major shareholders should have the seven requirements of the listed company's operation ability and its listed companies.

Finally, an investment company called new Tianyu lakeside bought a 25% stake in the new century at 352 million yuan, and then increased its capital by 323 million yuan, and finally got a 39% stake.

For the introduction of such an investment institution, Cai Zhenliang, general manager of Shanghai Sheng CE capital, told reporters that this could play an important role in optimizing the ownership structure.

The second one swallowed up the boss.

In January 2009, Cui Jian, director of the Chongqing municipal SASAC, said that Chongqing SASAC would seize the favorable opportunity and firmly promote the overall listing of the seven state-owned enterprises groups.

The seven state-owned enterprises are Chongqing bank, Chongqing water affairs, Chongqing business group, Si Lian Group, Chongqing Construction Engineering Group, Chongqing Guoxin and Chongqing energy group.

In the past two years, the overall listing of Chongqing state owned group has made substantial progress: the successful issuance of A shares in Chongqing Iron and Steel Group has raised 1 billion yuan to achieve A+H share listing; Chongqing Mechatronics shares have been listed in Hongkong, and Southwest Securities has also been listed on the ST long haul Market; in March this year, the Chongqing water A shares of seven major state-owned groups were successfully listed.

The new century of Chongqing department store was launched under the background of the Chongqing municipal government pushing the overall listing of business groups.

However, this marriage at the government level is not necessarily desirable for the enterprises themselves.

Because this is a weak takeover of the strong.

From the sales scale, the data released by China chain operation association in March 25th showed that in 2009, the sales volume of new century department stores was 13 billion 800 million yuan, far higher than the 8 billion 300 million yuan of Chongqing department store.

{page_break}

"Chongqing department store did not have good operation of new century department store, but because Chongqing department store is a listed company with shell resources, it is more desirable for Chongqing department store to absorb the new century from the government level and make greater contributions in the capital market.

But for enterprises, the new century is certainly not willing to be acquired.

Xu Shengxiong, President of Chongqing chain operation association, told our reporter.

As a witness to the development of Chongqing's business, a subtle change that Xu Shengxiong has experienced is that since the merger and acquisition of the two enterprises were launched, the department store in the new century has not had any mental development.

"In recent years, Yonghui supermarket from Fujian has been developing rapidly in Chongqing. If it is not for M & A, the development of department stores in the new century will hinder the expansion of Yonghui supermarket to some extent."

Xu Shengxiong said.

It is understood that Yonghui supermarket opened its first store in Guanyin Bridge in Chongqing in 2005. Up to now, there are 48 stores in Chongqing.

For the "second year" merger and acquisition of "boss", Chongqing commercial agency said in an interview with the media: regardless of the hundred or new century, its major shareholders are business group.

Standing in the position of major shareholders, mergers and acquisitions only integrate internal resources rather than mergers based on performance.

The advantage of such M & A is that the business resources of Chongqing have been integrated, and will be more favorable from investment to procurement, logistics and financing.

The merger and acquisition of two large department stores will form an aircraft carrier of domestic commerce and trade and become more competitive.

This will change the future business competition pattern in Chongqing and even in Southwest China.

In the past, Chongqing department stores and the new century were independent businesses. After mergers and acquisitions, through resource integration, competition in the same industry did not exist.

However, insiders believe that although the two assets have been merged, the integration at the operational level will be very difficult.

"The main problem is personnel resettlement. The directors of both enterprises are Deputy departmental cadres. Who will occupy the upper level will be a very sensitive choice."

The source said.

"National prefix" force

For local state-owned commercial enterprises to merge and merge, Chongqing department store's acquisition of new century is not a case.

In recent years, the large state-owned commercial groups such as Bailian Group and Wu Shang Lian have been accelerating the integration trend.

In June 25th, after the merger of the Bailian super business sector, Lianhua and Hualian, the integration of 600631.SH and 600827.SH was gradually put on the agenda.

In July, Bailian, friendship and friendship B shares (900923.SH) also announced that as the company's substantive controller Bailian Group was planning a major reorganization related to the company, it was suspended for 5 working days.

According to sources, Bailian may inject the department store industry under the friendship into Bailian shares, and Bailian may put the Bailian Agel Ecommerce Ltd into friendship.

In June of this year, Wuhan China business announced that it would implement private placement to Wuhan solidarity group to purchase its 49% stake in Wuhan Zhong Shang Jie Mao Mao Management Co., Ltd.

Once the paction is completed, the sale will become a wholly owned subsidiary of Wuhan.

The move of Chinese traders in Wuhan was interpreted by the industry as a signal to restart the road of integration.

"State owned assets are being deployed in a tight layout. The intention of the government to integrate commercial aircraft carriers through mergers and acquisitions is obvious.

With the adjustment of China's economic structure and the pformation of its development mode, this trend will become more and more obvious.

Hong Tao, a professor at Beijing Technology and Business University, told reporters.

However, data show that this government led merger and reorganization of large state-owned enterprises is not as good as expected.

Take Bailian Group as an example, at the beginning of the establishment of Bailian Group, its huge sales volume ranked the top of China's top 100 list companies, but with the continuous development of private enterprises, in 2009, Bailian Group was surpassed by Gome and Suning and ranked the third among the top 100 chain companies in the country.

Zhou Yong, a professor at the school of management at Shanghai Business School, believes that the biggest drawback of state-owned retail enterprises is poor market responsiveness, overstaffing, seniority, bureaucracy, leadership by laymen and even laymen.

"Easy to achieve and difficult to integrate".

How do we get together after finishing the whole thing? It's collation, putting the same things together.

It's easier, but harder.

In fact, what we are getting together now is different. Objectively, it can not form scale advantage. Two, it bears heavy old debts and heavy historical burden. It is neither a strong alliance nor a strong annexation. It is a good quality enterprise that can easily drag off the strong and poor. It is easy to drag off the strong quality enterprises. The three is that the state-owned enterprises lack strong enterprising spirit, market consciousness and ability to adapt to the market from top to bottom, and they also waste too much on their seniority.

Zhou Yong told our reporter.