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Chinese Enterprises M&A on IP for brand value

2016-08-11 国家知识产权局

During July, the Chinese enterprises once again set off a boom of mergers and acquisitions (M&A) in the global market : following  the €3.3 billion acquisition of the German giant robot KUKA by Midea will be fully completed, on July 27, Leshi carried out a $2 billion acquisition of the US leading LCD TV brand VIZIO. Liu Xique, who is responsible for the intellectual property  of Midea, said that the current Midea in the world obtained 38,600 patents, nearly 10 times of KUKA, but Midea has only more than 100 robot-related patents. Acquisition on KUKA company  will add new impetus to Midea’s development. “During the acquisition of foreign brands, we pay more attention to their intellectual property.” According to a number of persons who were responsible for the foreign mergers and acquisitions, Chinese companies have now entered the era of the global market acquisitions and mergers on intellectual property.


“Intellectual property has become the core assets of enterprises to participate in international competition, for enterprises, obtaining intellectual property through the acquisition of international brands, is not only the needs of ‘going out’ but also the needs of development.” Cao Xinming, standing deputy director of Intellectual Property Research Center in Zhongnan University, said in an interview.


The examples of Midea is not accidental. According to incomplete statistics, in the first half of this year, Chinese enterprises made 401 overseas mergers and acquisitions cases, with a total of $135.3 billion, exceeding that of last year and setting a historical record. In January, Wanda Group announced to  acquire 100% stake of the US company Legendary Pictures with no more than $3.5 billion, and get its brand and market; in February this year, China Chemical Industry Group spent $42.8 billion to acquire Swiss seed and pesticide giant Syngenta, accessing a number of patents and brand rights; East Ocean company spent $65.016 million to acquire 100% stake of the Avioq company, a US vitro diagnostic company, and obtained the relevant patents and brand rights. “One of the common characteristics of these overseas acquisition is that they pay a very high value of intellectual property, which has become the focus of Chinese enterprises overseas M&A.” Cao Xinming said, overseas mergers and acquisitions not only bring new starting point of innovation, but also quickly enable the Chinese enterprises to own a mature brand and sales channels, which is very favorable for them to participate in international competition. “New trends in overseas mergers and acquisitions show that compainies are aiming to intellectual property rights acquisitions, which is the practical way to create Chinese brand.” Cao Xinming stressed. (by Zhao Jianguo)


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