M & A

Rhön: Tug of war over clinic operator

Rhön-Klinikum AG, listed in the MDAX and CDax, has filed an appeal against the Bundeskartellamt (Federal Cartel Office). The competition authorities had approved competitor Asklepios to increase its stake in Rhön to 10.1 percent. However, in Rhön the blocking minority is already reached and Asklepios is thus able to block major strategic decisions.

Before Asklepios may increase its stake in Rhön, however, the company has according to the authority's stipulation to sell some facilities in the area of Goslar (Lower Saxony). This is to avoid a dominant position of Asklepios in the region.

However, the hospital operator Rhön-Klinikum holds to its vision of a nationwide distribution network and maintains the Bundeskartellamt's regional view of the situation is short-sighted. The complaint is currently being examined by the Düsseldorf Higher Regional Court; a decision would set a precedent. The hospital operator is confident of the appeal's chances of success, as a nationwide network structure of medicine is significantly hampered by the decision of the cartel investigations.

In order to advance its national plans, the hospital operator had partnered last year with Fresenius. The Dax Group was actually to take over the Prime Standard value Rhön-Klinikum, but both Asklepios and Fresenius's competitor B.Braun Melsungen had torpedoed that with a short-term holding of more than five percent.

PNE Wind: concentrated wind power

Wind farm developer PNE Wind AG, listed in the Prime Standard of the Frankfurt Stock Exchange, has acquired a 54 percent stake in wind farm developer WKN AG. An increase to 80 percent would be considered at a later date, according to management. The Cuxhaven company will pay the purchase price of approximately €50 million in cash and shares,. The issuance of a corporate bond of 100 million euros is planned, to refinance the acquisition in part.

WKN supplements PNE, among other things, in the project regions France, Poland and Italy. PNE has been involved in projects in Germany, Hungary, Romania, Bulgaria, Turkey, the United Kingdom, the United States and Canada. The Cuxhaven firm in 2012 generated sales of approximately €84.4 million and a net profit of about €17 million. WKN is smaller, with a net profit of €6.6 million. The WKN brand will continue in Husum. The majority shareholder of the Husum company has been Volker Friedrichsen Beteiligungs-GmbH.

Chinese technology hunger: sights on the German Mittelstand

The German Mittelstand is a popular destination of Chinese acquisitions, as numerous examples from the year 2012 show. The Swabian company Putzmeister is now part of the Chinese concrete pumps group Sany. LDK Solar now holds two thirds of Sunways. Kiekert, manufacturer of car locking systems in North Rhine-Westphalia, was taken over by Beijing automotive supplier Hebei Lingyun. Logistics company Rhenus Mitgard or concrete pump maker Schwing are also in the hands of Chinese corporations.

In German SMEs investors find, according to a study by the Bertelsmann Stiftung, many world leaders with technological know-how, established distribution channels and high brand awareness. The acquisitions were made mostly by Chinese private companies, not state groups.

Another study by the Technical University of Munich and the Munich Innovation Group confirms the acquisition trend. According to this analysis, Chinese investors are oriented at key technologies predetermined by the government and target German companies to buy. The numerous acquisitions in recent years were facilitated primarily by the financial crisis. Many German SMEs might have had no optimal negotiating position.

In search of access to high technology and technological know-how, however, the 50 Chinese buyers examined by the Technische Universität München focused after the acquisition primarily on knowledge transfer and productive cooperation rather than technology drain to China. Many wanted to expand their market position through a European foothold and build a strategic base, for example, to study the European and U.S. market or to circumvent EU customs and import regulations.

Both studies emphasize that the reservations about investors from the Middle Kingdom were unfounded. Chinese direct investment had a mostly positive effect on the value added in Germany and the commitments had in most cases kept jobs and locations in Germany.