Wahaha and Danone’s public break came from Danone’s proposed acquisition of a 51% stake in the Wahaha non-joint venture at a low price of 4 billion yuan. Danone is based on a contract 10 years ago, threatening Wahaha if he does not perform on the 30th, then he will see it in court.
I have to admit that due to historical reasons (the experience of Wahaha capital is insufficient, the value of the trademark is not paid enough, the market financing environment is difficult, the government attracts foreign investment, etc.), Wahaha is passive in legal terms (Daon has 51% in the joint venture company). Equity, and the joint venture owns the right to use the Wahaha trademark. If the company other than the joint venture company uses the trademark, it must be approved by the board of directors of the joint venture company).
Although it may be a slight loss in legal terms, based on Danone’s mistakes in rushing for success, it is based on Wahaha’s time, geography and N-strength. Based on Wahaha’s rationality, the author believes that Wahaha’s equity dispute Wahaha has a higher probability of winning (see the article "N kinds of possibilities after Wahahad can break" for detailed prediction)
Danone committed a serious mistake in the timing of the acquisition.
1. From the perspective of social environment: Foreign capital mergers and acquisitions of Chinese enterprises. In the long run, China has the potential to become a Western economic colony. Events such as Carlyle-Xugong and SEB-Supor have caused extreme resentment among the Chinese people. The Chinese government has also begun to formulate various anti-monopoly anti-acquisition regulations to protect national economic security.
If five years ago (the sensitive period when China joined the WTO), Danone proposed an offer, and the social environment and public sentiment were much more favorable. Unfortunately, Danone missed a good time.
2. From the perspective of Danone's own operating capacity: In the first three months of this year, Robber's huge losses and old employees were widely reported by the media. The negative image of Danone's poor management is deeply rooted in the hearts of the people. Now that the rest of the Robust incident has not been made, it is proposed to forcefully take over Wahaha. After Zong Qing, the Chinese government/people will inevitably be skeptical about Danone’s ability to operate, fearing that Wahaha will become the second of Robust. It is really stupid for Danone to make a tender offer on the premise that its own operating capacity is questioned.
3, from Wahaha's own point of view: 2006 is a period of more profit in the history of Wahaha, but also a highly centralized Zong Qinghou personal prestige is more prosperous. At this time, Danone proposed a low-priced acquisition, and it did have the suspicion of stealing the fruit of victory. Imagine if Danone made an acquisition when Wahaha was unsatisfactory, and helped Wahaha out of the operational difficulties, employees would have less resistance.
In addition, although Zong Qinghou has entered the age of (62 years old), he still has the wisdom and ability to resist the invasion of Danone. Imagine if Danone continued to endure for 10 years, and when the real old age fell after Zong Qing, the offer was made again. What was the result? At that time, the old Zong Qinghou, who faces the succession crisis, will organize the evergreen for Wahaha (have to admit that the organization and operation of multinational corporations are relatively standardized), and may even agree to Danone’s acquisition requirements, which will be today’s revenge.
Danone did not propose to acquire Wahaha five years ago or 10 years later. Instead, in 2007, when China’s anti-monopoly anti-mergers were soared, this was a huge mistake made by Danone.
In turn, this gives Wahaha an excellent opportunity to oppose low-priced acquisitions, oppose unfair contracts, and take the opportunity to modify contracts to get rid of Danone's shadow. Whether it is the people or the government, whether internal or external, emotional or rational, the strength of Wahaha has enough to make Danone make huge concessions.
Waha's N cards
1. The support of the Chinese people:
In China, Wahaha, Lenovo, Haier and other national brands are China's pride. When Haier is connected to the world, Wahaha faces the merger of foreign brands, which is embarrassing and more sympathetic. Just as Coca-Cola represents the United States, Danone represents France, and Wahaha represents China. People are emotional animals. As long as they have a little patriotism, they will definitely stand on the Wahaha side. The voting of hundreds of thousands of netizens, the tens of thousands of comments, and the support of one side, this is the embodiment of public opinion, which is the power of emotion.
2. Support from most media public opinion in China:
In addition to individual media with foreign backgrounds or unconventional media, most of China’s media’s comments and reports are clearly tilted on the Wahaha side. “Wahaha was forced to acquire by Dakengâ€, “Dance with the wolf, first set up defense and dance again†all hinted that China The attitude of most media.
3. Specific support from the Chinese government:
People who win the hearts of the people have the world, and those who have lost their hearts have lost the world. The Chinese government has become more sensible, stronger, and more responsive to public opinion. The two-tax merger and anti-monopoly regulations have issued clear signals: foreign capital uses the weakness of the Chinese government, what is “super national treatment†and “low-price acquisition, slaughtering The "golden" era of "action" is gone forever; the statements of the local governments of more than ten Wahaha foreign subsidiaries such as Sichuan, Henan, and Hubei have already issued clear signals of support.
4, the internal ambitions of Wahaha, the same enemy:
The statement of the Wahaha staff/sales team reflects a high degree of unanimity and determination to fight against the enemy. For many years, Danone has only played the role of an investment fund. Originally, Wahaha people regarded it as a "wealth-splitter, and they won't get it." Now suddenly a low-cost tender offer, how can we not let the Wahaha people angry?
Taking a step back, even if the Danone court won, it would not be able to successfully take over the Wahaha joint venture company, and it would be a failure to send people to operate. When a company's management and ordinary employees fully resist foreign mergers and acquisitions, what will happen in the future, such as violence, strikes, ... and even daily production and management. This may be the factor that Danone is more likely to vote for.
Cases of mergers and acquisitions around the world show that the root cause of most failures is the incompatibility of corporate culture (Robbes is typical) and the hostility and non-cooperation of acquired companies.
5, the distributor's strong support
In the consumer goods industry, brands and channels are two legs. Wahaha's extremely powerful "sales sales" distribution system across the country has far-reaching influence in the financial sector. This is one of the core competitiveness of Wahaha products selling well in China. This "common sales" system was woven by Zong Qinghou for more than ten years. It is not a false statement that the industry is rumored to spend more than 200 days a year visiting the market to visit customers. In the time of Wahaha's distress, these dealers with a sense of courage and force have been able to support Zong Qing, and even make Danone chill.
If Zong Qing’s consequences lead the old company to another company, I fully believe that these hardcore dealers will definitely turn their backs to the new company. The management right of Daniel’s hard-working joint venture company is not only strongly resisted by employees but also hindered by customer channel faults.
The two deputies of employees and dealers have a very deterrent strength, which makes the situation of Danone awkward. The result of winning the lawsuit is the operation dilemma of the joint venture.
What's more, even in legal terms, Wahaha has two cards:
6. Jurisprudence - Legality of Trademark Licensing Agreements
In 1996, because there was no clear recognition of the great value of the Wahaha trademark, the Wahaha trademark was only priced at 100 million yuan (and the value of the Wahaha trademark evaluated by the Beijing Intangible Assets Appraisal Center was 2.2 billion yuan!), but the national trademark was invested. The bureau did not approve the transfer based on reasons such as national brand protection. As a last resort, under the coercion of Danone, Wahaha’s trademark license was filed with the Trademark Office in a simplified contract, that is, the “Yin and Yang Contract†appeared. According to the trademark law, the license agreement can be regarded as invalid... Among them, the legal issues are complicated, and there are also issues such as bona fide third parties. For details, please see "Wahaha and Danone Conquering Daughter or Cheng Zong Qinghou Winning Killer"
The use of a trademark licensing agreement to propose a forcible acquisition is a more favorable weapon that Danone believes. However, if the agreement itself has legality issues and new problems such as bona fide third parties, how do you think of Danone?
7. Jurisprudence - the acquiescence of the board of directors of the joint venture company
As early as 1996, there were five non-joint ventures in Wahaha. Since 1999, dozens of new production companies have been established in various places. Danone has known about the Wahaha non-joint venture company through financial statements and so on. Moreover, the 2005 Trademark License Agreement No. 1 Amendment Agreement clearly lists the list of 27 non-joint ventures licensed to use the Wahaha trademark. Obviously, the use of the Wahaha trademark by non-joint venture companies has been recognized by the board of directors of the joint venture company. Eight years later, Danone has now publicly said in the media that he does not know that the typical blink of an eye is detrimental to the image of an international company.
In the past ten years, talking with Wahaha is the president of Danone Greater China - Qin Peng (Chinese, Beijing grew up, French son-in-law), it should be said that he has more say in terms of Danone. But in fact, on behalf of Danone, Fan Yimou, the president of the Asia-Pacific region, who has been in office for less than five years, has not experienced the joint venture process at all, and it is even more difficult to understand the ins and outs of it.
The reason why Qin Peng did not come out in the incident is that it is not being reused by Danone, or that it is still a Chinese conscience. Knowing that the contract was set up in the same year, I know that Zong Qing’s role in Wahaha is irreplaceable, and I know more. Danone was so pale in this forced acquisition that he was hiding behind the scenes.
8, sitting on the cool brand, nutrition fast line and other famous brands -- this is the strength of Wahaha Dare to break the strength with Danone!
Wahaha management, who has lost 10 million steps and lost management of the joint venture company, can Dongshan be up?
The answer is: sure, as long as Zong Qing is willing. In fact, Wahaha Group and non-joint venture companies already have many famous brands on their hands: nutrition fast, cool, milk doll, very, active, cooking... (who are in the hands of these trademarks, interested in Friends can check on the "China Trademark Network" to know)
After years of development, Wahaha has not been the era of a single brand to fight the world. In addition to the Wahaha brand's important influence on bottled water products (unfortunately, the profit of the bottled water industry is too low, Danone is also a chicken rib), in the children's milk beverages that account for the important turnover and profit of Wahaha, the cool-up, Baby dolls, juice milk drinks - nutrition fast line and other product brands above, Wahaha is just a guaranteed brand.
Relevant research shows that even if the independent brand that loses the guaranteed brand will not affect the public's willingness to purchase, in other words, with the support of these brands such as Shuangxin and Nutrition Express, together with the support of employees and customers, Zong Qing The new company will soon be playing a new world! ! ! ! !
"It's not working, another brand" Zong Qing's surface is low-key, but in fact he has a well-thought-out. This key strength, Wahaha did not openly, but Danone could not know the power...
In addition, Wahaha also has the support of the Chinese business community/industry association, the joint statement of the Chinese education community/college/experts and scholars (Wahaha is a school-run enterprise)... and so on.
Based on Wahaha's N strengths, especially the national cards, public opinion cards, employee cards, customer cards and new brand use cards, it is also based on Danone's acquisition timing is seriously inappropriate, the bid is too low, the attitude is too strong, pure interest There are many mistakes in N and other issues. The author firmly believes that the overall probability of winning in Wahaha is greater, and that Danone will make greater concessions.
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