There was a delicate balance in the Aussie sugar takeover wrestling, with farmer shareholders supporting Jiagu International and CSR boards supporting Wilmar International.

Wilmar International is a bit of a tiger.

Jiagu International closely follows the quotation and cannot open the gap in terms of funds, and the "farmer route" taken by Jiagu International, Wilmar International is reluctant to pick up people's teeth and wisdom, and does not have such patience to treat sugar farmers, who are accustomed to making deals with the upper class in suits and leather shoes, glass of red wine and green, and it is too difficult for them to deal with the "mud legs" at the bottom.

Wilmar never imagined in advance that its M&A business would be blocked by a group of grassroots "rabble".

And with the growing number of sugar farmers rallying around Jiagu International, the support that Jiagu International has received is not the same.

Wang Yuye struck while the iron was hot, and visited the Australian Minister of Agriculture, Food and Forestry in full swing to "canvass" for the purchase of CSR Sugar, seeking support from all parties.

Although it still lacks experience in overseas mergers and acquisitions, it has a resolute intention and strong execution, and has done an extremely good job in the layout of the competition plan and the understanding of competitors.

In addition, Wang Yuye has a clear understanding, in fact, in many international mergers and acquisitions, the transaction price is not the most critical factor, especially when the quotations of the two parties are not up or down.

Detailed negotiations such as brand protection and localized employment, as well as the acquirer's ability in the international market and relevant government policy attitudes, are important factors in determining the success of the acquisition.

Although in terms of internationalization, Wilmar International, as a multinational company, has a mature system in international mergers and acquisitions, and occupies a considerable advantage.

However, Wang Yuye won the support of the majority of sugar farmers by ensuring the interests of local sugar farmers, and won another game.

Later, in contact with Australian officials, Wang Yuye was keenly aware of a key point: the Australian government's concern that the acquisition would affect the pricing of Australian sugarCSR Sugar has a market share of about 50% in Australia, which plays a decisive role in the pricing of sugar.

He took the opportunity to emulate the experience of PICs in adopting the principle of "separation" and not interfering in the price decisions of overseas management, emphasizing that Jiagu International will continue to support the current practices of CSR Sugar, including full compliance with the current sugarcane supply agreement and raw sugar sales agreement, and use the same companies that used to be familiar to sugar farmers in the next stage of processing.

This is precisely what Wilmar International is difficult to commit, because it is making a layout into the food and beverage ingredients industry, and the demand for sugar is self-evident, and once the acquisition is successful, the export trade structure will inevitably be adjusted.

On the contrary, Jiagu International can accept the mature sales channels that CSR Sugar has formed, and patiently wait until the situation is fully controlled before making adjustments.

With the passage of time, the advantages gradually tilted towards Jiagu International.

In the new round of offers, Jia Gu International won the unanimous approval of the board of directors of CSR Group and the vote of sugar farmers shareholders with an offer of A$1.78 billion, and finally stood out in the wrestling with Wilmar International.

The above transaction is subject to the approval of the Australian Foreign Investment Review Board, the New Zealand Overseas Investment Office and the Ministry of Commerce of China, but from both the CSR perspective and the Wilmar International perspective, the chances of further negotiations between the two parties are slim to none.

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When the news came back, the management of Jiagu was overjoyed.

Qi Zheng, who understood the entire acquisition process, personally sent a congratulatory message to Wang Yuye: "Fortunately, you came out and opened up the sugar road for us in one fell swoop!"

Wang Yuye on the other end of the phone said a few words modestly, and then said: "After winning the CSR sugar industry, our Jiagu really has a high starting point in the sugar industry. ”

Although the tender offer has not yet received final approval, the acquisition team of Jia Gu International has been granted access to the production management of CSR Sugar.

Wang Yuye is clearly pleased with the upcoming CSR sugar assets: "All sugarcane in Australia is harvested by mechanized or automated mechanized harvesting. The sugarcane harvesting and transportation planning system is computer-controlled, which allows the sugarcane transportation between the farm and the sugar mill to be controlled very precisely. Under the premise of ensuring 24-hour continuous production in the factory, the CSR sugar factory uses a thorough harvesting and transportation plan, and there is no sugarcane accumulation in the factory, and there is no stockpiling space at all, which fully demonstrates the professional division of labor service system. ”

"CSR Sugar is a leader in bulk raw sugar processing capacity, with the most advanced and effective bulk raw sugar storage and processing equipment in the world. Moreover, the sugar factory equipment has a high degree of automation control, low energy consumption and good product quality. These advantages provide a strong competitive ...... for the sugar produced."

"All these provide us with direction and experience for the future integration of the domestic sugar industry!"

Qi Zheng nodded as he listened.

Before entering the sugar industry, Jiagu conducted a survey of the domestic sugar industry and found that the domestic sugar industry, like most domestic industries, has fallen into a situation of "big but not strong" after years of development.

Compared with the major sugar-producing countries in the world, domestic sugar products, especially sucrose, are still mainly primary products, with single product varieties and low added value, weak product market competitiveness, and lack of "industrial discourse" in the domestic and foreign markets.

Taking sugarcane processing as an example, all domestic sugar mills use the one-step method of production, resulting in an overall low grade of products, and the sugar products produced cannot enter the futures trading markets in London and New York. In Australia, however, the two-step method is mostly adopted, that is, raw sugar is first produced in the raw material concentration area with simple process equipment, and then transported to the refinery in the big city for refining and processing.

This is also the reason why Jiagu International started with the acquisition of mature sugar companies from abroad, as long as it fully grasps the CSR sugar industry, the integration of the domestic sugar industry in the future can achieve "dimensionality reduction", and provide advanced technology and experience in many links such as sugarcane processing technology, technical level and energy consumption, effective utilization of sugar by-products such as sucrose bagasse and molasses.

"However, the key is whether we can successfully control the CSR sugar industry. Acquisitions are only a small step in testing the waters of overseas M&A, and the real success depends on post-merger integration and operation. Wang Yuye's calm voice came.

As the saying goes, marriage is easier than life.

Qi Zheng naturally knows that how to achieve the perfect integration of Chinese and Western management concepts and corporate culture between Jiagu International and CSR Sugar is a big challenge, and whether Jiagu International has international management capabilities is a problem that needs to be solved urgently.

"While making good use of international professional managers, it is time to accelerate the cultivation of our own international management team!" said Qi Zheng.

In order to become an enterprise with the ability to "go out and bring in" international operation, it is undeniable that in the face of the differences in policies, environment, culture and other aspects of the world, the team's ability to operate internationally, practical experience and talent reserve are facing huge challenges.

In fact, this overseas merger and acquisition, no matter whether it succeeds or fails, is a good practice for the Jiagu system.

Of course, success is best.

At the end of December, Jiagu International's takeover offer was approved by the local Foreign Investment Review Board, and Jiagu International finally acquired 99% of the shares, becoming the absolute controlling shareholder, and CSR Sugar changed its name to Jiagu Sugar, becoming a subsidiary of Jiagu in Australia.

CSR Sugar is Australia's largest producer of raw and refined sugar, the world's second largest exporter of raw sugar, and a leader in the Asian market. After the successful acquisition, Jiagu International will acquire 50% of Australia's raw sugar production capacity and about 4% of the sugar mills in international transactions. Jiagu Sugar has thus entered the top three in the global sugar industry!

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