Ingram Micro's New Chinese Government Ownership

By: John Honovich, Published on Feb 23, 2016

Ingram Micro is fighting back. Many have raised concerns about its agreement to be acquired by the Hainan Airline Group (HNA).

In a new SEC filing, Ingram Micro makes its case about why their impending Chinese owners will not have any negative impact. In particular, they declare:

"We have been assured by the HNA Group that neither they nor Tianjin Tianhai have any direct ownership stake held by the PRC government."

Unfortunately for Ingram, there is plenty of evidence for substantial Chinese government ownership and control. We break this down.

****** ***** ** ******** back. **** **** ****** concerns ***** *** ********* to ********** ** *** ****** Airline ***** (***).

** **** *** ******, ****** ***** ***** its **** ***** *** their ********* ******* ****** will *** **** *** negative ******. ** **********, they *******:

"** **** **** ******* by *** *** ***** that ******* **** *** Tianjin ******* **** *** direct ********* ***** **** by *** *** **********."

************* *** ******, ***** is ****** ** ******** for *********** ******* ********** ownership and *******. ** ***** this ****.

[***************]

**************

******* ********** ********* ** companies ** ******* ************, *** *** *****-***** ****** Supervision *** ************** ********** (e.g., ***** ******* *** approves Hikvision's ***** *****). ***** is * ********** ****** **** manages ********* *** *** Chinese **********. ***** *** SASACs ** **** *** central *** ******** *****.

Hainan *****

******* ******* **** **** the ****** ******* ************'* largest *********** *** ******** in *** ****** ***** (Hainan ** *****'* ************ province).

*** *******, **** ***** **** ********:

"*** “** *****” ********** of ****** ******** ** attributable ** ****** *****.... ****** SASAC (******* * ******-***** subsidiary, ****** ********** *********** Holdings ******* ******* (海南省發展控股有限公司)) indirectly ***** ** *********** 24.97% ******** ** ***** China ***. ** ** the *** ** ******** 2015, ***** ***** *** held *** **.**% ******** in ****** ******** ******** and/or ********** ******* *** wholly-owned **********(***)." [****: ***** China *** ****** ** *** *****].

******* ********* ** **** made ** * **** ****** *******'* ********* report.

***** ******** ******* *****, **** **** ***** HNA ******** * $*.* billion ******* *********, **** "****** ******** ***** .... will ****** *** *******’* controlling *********** [**] **.*%".

******, **** ******** ******* *** ********* *********** agreement **** *** ****** SASAC.

** ******, **** ** this ** ***.**** **** ************ **** ******** *** structure *********** ** ******'* SASAC:

Communist ***** *********

** **** ****, *** established *** *** ********* party ********* [**** ** longer *********] ** ********** party ********. **** ** typical ** ***** ********* with *********** ********** ******* / ********* (*.*., ********* *** *** ***** Communist *****).

Ingram *******?

********* ** ******'* *********:

"** **** **** ******* by *** *** ***** that ******* **** *** Tianjin ******* **** *** direct ********* ***** **** by *** *** **********."

** ** ******** **********. *****, ******* of ****** ********* **, they **** *** *** onus ** *** *****, i.e., ** ** ** revealed ** ** *****, it ** *** ***** fault, ** ** *** fault ** *** *** 'assuring' **** *******. ********, by ********** ** ** not ***** '******' *** by *** '***', **** can ***** ****, ***** the ***'* ***** ********** ********* ********* and *** ************** ******* Hainan ********, ****** **** Beijing, **** *** ********* may ** ********** *** not * ***.

Impact / *** ** **?

** *** *** ****, the ******** ********** *** American ********** **** ** have ******* ***** ******'* forthcoming ******* ******.

** *** *****, ******* the **** ***** *** America ** ** *** a ******* ******** ********* a ** ***********, ***** will ****** ********** *** remaining ** ************.

Comments (7)

Jeremy Ellis

02/23/16 03:02pm

No one was buying their stuff in the first place (i.e. look at their financials), I doubt it gets any better, or integrators start supporting them now.

John Honovich

IPVM | In reply to Jeremy Ellis | 02/23/16 03:06pm

Ingram Micro $46 billion revenue 2014.

They are not a major player in video surveillance but they are one of the biggest in general IT.

Undisclosed #1

In reply to John Honovich | 02/23/16 04:02pm

The biggest.

Undisclosed #1

02/23/16 05:05pm

On the other, perhaps the best thing for America is to let a Chinese airliner mismanage a US distributor, which will likely strengthen the remaining US distributors.

And if it gets cancelled, it will strengthen Ingram Micro to the tune of $400,000,000.

#ingramaintnofool

John Honovich

IPVM | In reply to Undisclosed #1 | 02/23/16 05:22pm

"it will strengthen Ingram Micro to the tune of $400,000,000."

From the SEC Filing:

"The merger agreement also provides that upon termination of the agreement under certain circumstances, Tianjin Tianhai would be obligated to pay Ingram Micro a termination fee, which will be equal to $200 million if the agreement is terminated in the first 30 days after signing, $300 million if the agreement is terminated between the 31^st day and the 60^th day after signing, and $400 million if the agreement is terminated any time after the 61^st day following signing"

Armando Perez

IPVMU Certified | 02/23/16 05:09pm

Maybe they will have an exclusive on Hikvision. :p

Michael Goodwin

02/23/16 08:22pm

Since you guys are so worried about "local supply" it would make sense, just start pumping all the Chinese stuff through them.. they will be a local supplier

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