Chinese firm in €770m bid for Grammer, Cascade reportedly unhappy

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A somewhat generous offer to take over the remaining shares of German automotive parts supplier Grammer AG has faced disagreement from the company’s biggest shareholder, Cascade International Investment GmbH, according to news reports.

On 29 May, Grammer said that it had concluded a business combination agreement with its second largest share-holder, China’s Ningbo Jifeng Auto Parts Co Ltd, for the sales of its remaining shares to the Chinese company.

Based on the agreement, Jiye Auto Parts would buy Grammer shares for a total consideration of €61.25, which Grammer said was 19.4% over the closing price of its shares as of 28 May.

Jiye Auto Parts is part of Jifeng Auto, which increased its stakes in the German seating supplier to 25% in October last year.

This, however, has reportedly been rejected by Cascade, which is controlled by the Bosnian billionaire family, Hastor. 

Cascade said in a 30 May statement to Bloomberg that it found the offer ”unsatisfactory" in light of Grammer’s recent acquisition of US thermoplastics process technology company, Toledo Molding & Die on 22 May.

According to the statement, a more realistic price for the shares could be around €100.

“We, too, have heard from the media that Cascade believes the shares should be in the region of €85 or even €100, but this has not been officially communicated to us,” said Grammer VP communications Ralf Hoppe speaking to PNE.

He added that the offer by the Chinese group has not been officially published.

“They are preparing the offer documentation and will be filing it with German financial authorities soon,” Hoppe added.

Once the offer is officially published, a four-week period will start for shareholders to weigh the deal.

Grammer’s regular shareholder meeting is set for 13 June, where Hoppe expects the issue to be further discussed.

According to a 30 May report by Bloomberg, Grammer shares rose to €65.50 in Frankfurt on 30 May following its report on the rejection of the deal.

Located in Amberg, Germany, Grammer AG specialises in the development and production of components and systems for automotive interiors as well as suspension driver and passenger seats for on-road and off-road vehicles.

With 13,000 employees, Grammer operates in 19 countries around the world.

The takeover by Ningbo Jifeng Auto Parts Co Ltd would represent yet another notch in China’s German acquisition belt.  Chinese acquisitions in Germany have stepped up in recent years: in 2016, robot maker Kuka AG was bought by Midea Group Co., while that same year, leading machinery supplier KrausMaffei Group was taken over by Chinese state company ChemChina.

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