After more than half a months delay, Grees mixed reform finally boots landed..
On the morning of December 2, Gree Electric announced that due to significant progress to be made in the change of the companys control right, in order to avoid abnormal fluctuation of the companys stock price, the companys securities will be temporarily suspended from the opening of the market on December 2, and the suspension time is not expected to exceed one trading day.
On the evening of February 2, Gree Electric announced that the companys controlling shareholder Gree Group and Zhuhai Mingjun signed a share transfer agreement, stipulating that Zhuhai Mingjun would accept 902 million shares of Gree Electric held by Gree Group (accounting for 15% of Gree Electrics total share capital) at a price of 46.17 yuan per share, with a total transfer price of 41.662 billion yuan, and announced that the companys shares would be resumed from the opening of the market on March 3.
41.662 billion yuan, which is the final price of 15% of the total equity of Gree Electric, but more from Hillhouseu2014u2014
According to the announcement, Zhuhai Hillhouse and other companies agreed to promote the equity incentive plan for the management and key employees of the listed company with no more than 4% of the shares of the listed company after the completion of the transaction.
Simply and roughly based on the market value (347.2 billion yuan) before the suspension of trading, 4% of the shares are about 13.7 billion yuan. For Grees management, the equity incentive plan given by Hillhouse is generous and friendly enough.
It is worth noting that the transferee has no actual controller, and after the completion of the share transfer, Gree Electric will change to no controlling shareholder and actual controller. The company structure without the actual controller is conducive to the checks and balances among the shareholders, which can avoid the influence of the major shareholders in the company and form a one word situation. It has always been regarded as a corporate governance structure conducive to maintaining the stability of the company.
What did Dong Mingzhu and Zhang Lei talk about?
After the share transfer, the top three shareholders of Gree Electric are Zhuhai Mingjun (holding 15.00%), Hebei Jinghai guarantee investment Co., Ltd. (Gree dealer system, holding 8.91%) and Gree Group (holding 3.22%). Gree Electric said in the announcement that this is a relatively decentralized equity structure, and no shareholders can control major business decisions of listed companies.
At this time, it has been more than a month since Hillhouse capital defeated Hopu investment and won 15% equity of Gree at a price of 40 billion yuan.
On October 28, Gree Electric announced that Zhuhai Mingjun is the final transferee of 15% equity of Gree Electric. According to the previously disclosed public collection plan, Gree Group shall sign a share transfer agreement with Zhuhai Mingjun within 10 working days. In the announcement, Gree Electric also mentioned that Zhuhai Mingjun has proposed an invitation for cooperation to the management of Gree Electric. If the management finally accepts the invitation and cooperates according to the invitation scheme, both parties need to make clear and disclose the cooperation scheme before signing the agreement.
However, Gree and Hillhouse finally broke the agreement - on the evening of November 11, Gree Electric announced that in view of the content of the share transfer agreement, there are still outstanding issues, Zhuhai Mingjun and Gree Group agreed to postpone the planned signing date of the share transfer agreement. This unfinished business shows that Zhang Lei and Dong Mingzhu have not reached an agreement on how to cooperate with the management of Gree Electric after the share transfer.
Zhang Lei, founder and CEO of Hillhouse capital
However, from the final signed share transfer agreement, the Gree Electric management led by Dong Mingzhu has won a very large space for themselves.
In addition to the equity incentive and no actual controller mentioned above, Dong Mingzhu and the management of Gree Electric also became one of the shareholders of the general partner (GP) of the transferee Zhuhai Mingjun, which is also one of the measures to maintain the stability of the management and the plans to cooperate with the management put forward at a high level.
On September 26, Dong Mingzhu and 17 senior executives of Gree Electric Co., Ltd. registered and established the equity investment company Gezhen investment. Dong Mingzhu himself holds 95.2% of the shares. After the transfer, Gezhen investment will hold 41% of the shares of Zhuhai Yuxiu Investment Management Co., Ltd.
According to the disclosure of Gree Electric, Zhuhai Yuxiu is the general partner (GP) of Zhuhai Xianying, and Zhuhai Xianying is the general partner (GP) of Zhuhai Mingjun. Among them, the equity penetration is more complex. In a word, the management of Dong Mingzhu and Gree Electric also occupies a certain position in the governance structure of Zhuhai Mingjun.
A great price war
At the same time, Gree launched the biggest price battle in the air conditioning industry in the past decade in the market.
As early as November 5, tianyancha showed that Gree e-commerce Co., Ltd. was established with a registered capital of 100 million yuan. Dong Mingzhu personally took the position of legal representative, which was regarded as an important signal for Gree to launch e-commerce channel again.
Subsequently, on November 9, Gree Electric announced that it would carry out a large-scale price reduction promotion on the day of the double 11 (Gree said that it would let profits of 3 billion yuan against low-quality and fake products), the lowest price of variable-frequency air conditioning was 1599 yuan, the lowest price of fixed frequency air conditioning was 1399 yuan, and the price reduction of several models reached 1000 yuan, with a total profit of 3 billion yuan. Shortly after the announcement, Midea, Haier, Oakes, Changhong and other brands announced to join the ranks of price reduction.
However, competitors such as Midea and Haier also stressed in their advertisements that they would reject the inventory machine when promoting the promotion activities, suggesting that Grees sharp price reduction promotion is to clear the inventory.
At the second extraordinary general meeting of shareholders of Gree Electric in 2019 on November 18, Wang Jingdong, the Secretary of the board of directors of Gree Electric, said that the 3 billion subsidies were borne by the company rather than dealers, and the impact of the subsidies on profits and gross profit margin was within the controllable range.
Previously, Dong Mingzhu expressed the concept of Gree does not fight price war on many occasions. In her view, Gree has core technology and does not need to adopt a low-cost strategy. In an interview with Wu Xiaobo last year, she also said that Gree is the leader of the air conditioning industry and will affect the decision-making of other enterprises in the industry, if I come out to fight the price war, I will die.
But after big subsidies of 3 billion yuan, Gree did not plan to stop the promotion, but decided to continue the price war of e-commerce channels to the line.
On November 26, Gree Electric announced that since November 27, consumers can enjoy the same price level as during the double 11 activity period in the Dong Mingzhus shop of Gree net and authorized stores all over the country, that is, the lowest price of variable frequency air conditioning is 1599 yuan, and the lowest price of fixed frequency air conditioning is 1399 yuan. Gree Electric did not set a time limit for the price reduction promotion, but said in the announcement that the profit will exceed 10 billion yuan.
It is still unknown when and how the price war will end and what impact it will have on the whole industry. At present, Gree has ushered in a new corporate governance structure and a new management incentive plan. In the future, whether high-level can play a certain role in the business level is also one of the focuses.
Source: Hu olfactory editor: Qiao JunJing, nbj11279