Tuesday, April 23, 2024

China’s HNA Group Entity to Buy Ingram Micro

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Technology distributor Ingram Micro Inc. agreed to be acquired for about $6 billion by a unit of Chinese conglomerate HNA Group.

The deal is the latest in a string of investments by Chinese companies in U.S. tech companies, including deals involving U.S. makers of computer chips that have attracted scrutiny on national-security grounds.

Ingram, founded in 1979, is one of the largest distributors of personal computers and other technology products including printers, scanners, TVs, videogame consoles, video monitors and software. The Irvine, Calif., company recently branched into a range of higher-margin professional services.

HNA Group, which claims more than 180,000 employees, evolved from marine shipping into operations that include transportation, logistics, tourism, banking and insurance. Its logistics group includes companies such as Jinhai Heavy Industry Co.

Alain Monié , Ingram Micro's chief executive, said the deal would allow his company to accelerate investments in technology while becoming part of a larger organization with "complementary logistics capabilities and a strong presence in China."

Chinese companies have become more aggressive lately in pursuing deals amid concerns about China's weakening economic growth, investment bankers say.

In January, Zoomlion Heavy Industry Science & Technology Co. offered to buy U.S. crane-maker Terex Corp. for about $ 3.3 billion, an attempt to override an existing deal between Terex and Finland'sKonecranes Oyj.

In December, a group including China Resources Microelectronics Ltd. and Hua Capital Management Co. made an unsolicited bid for Fairchild Semiconductor International Inc., which already had a deal with U.S. chip maker ON Semiconductor Corp.

Fairchild on Tuesday rejected the Chinese proposal, stating a preference for the ON transaction. Fairchild cited, among other factors, risks that the deal would be rejected by U.S. authorities on national-security grounds.

Royal Philips NV in January terminated the planned $2.8 billion sale of most of its lighting components and automotive-lighting unit to a Chinese investor, after the U.S. Committee on Foreign Investment blocked the deal on national-security grounds.

Many technology companies use Ingram to run their supply chains. Ingram, a longtime wholesaler of computer components and peripherals, launched a third-party logistics unit in 2000.

The U.S. company has completed many acquisitions over the years, like a deal for e-commerce fulfillment company Shipwire. It launched a cloud-computing-services portfolio in 2007.

For the nine months ended Oct. 3, Ingram posted sales of $31.7 billion. In late October, it projected fourth-quarter sales of $12 billion to $12.6 billion.

Along with the deal, Ingram Micro is suspending its quarterly dividend payment and its share-repurchase program.  Ingram's management team will stay in place, including Mr. Monié , and the company will remain in Irvine, Calif.

The boards of both companies have approved the transaction, which is expected to close in the second half of the year.

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