The US$6 billion (C$8 billion) acquisition of American technology firm Ingram Micro Inc. by Chinese aviation and logistics conglomerate HNA Group will be the largest Chinese acquisition of a US IT company ever, giving HNA Group market access to the over 160 countries which make up Ingram’s customer base.
Tianjin Tianhai, a logistics firm with registered capital of over RMB2.89 billion (C$606 million) and a component of HNA Group, is the acquiring firm. Ingram is 69th in Fortune 500’s corporation rankings, and approximately 1,700 suppliers around the world are represented by the firm. However, while Ingram’s 200,000 customers led to sales of US$11.3 billion in the quarter prior to the HNA acquisition, it still suffered a year-on-year decrease of 19% in sales. Business issues within the mobile technology sector were blamed, notably the company’s US$500 million exit from working with Verizon.
An investigation by the U.S. Committee on Foreign Investment in the United States (CFIUS) could still force the deal to be terminated, in which case the terms of the agreement would require Tianjin Tianhai to pay US$400 million to Ingram. HNA Group is comprised of 11 listed companies, with combined assets of more than US$90 billion. Worldwide, HNA Group employs nearly 180,000 and had US$29 billion in revenues in 2015. Chinese firms spent a record amount on overseas acquisitions last year, with more than US$100 billion in deals in 2015.