Multinational Corporation Dynamics [2018.10.18]
Tesla (Shanghai) Co., Ltd. has released information that it has successfully acquired 860000 square meters of industrial land in Shanghai Lingang for 973 million yuan, and has officially signed a land transfer contract with the Shanghai Municipal Planning and Land Resources Management Bureau. According to the plan, Tesla will build a wholly-owned Tesla super factory in the port area that integrates research and development, manufacturing, sales, and other functions. This project is the largest foreign-funded manufacturing project in Shanghai's history, with an annual production target of 500000 vehicles, which will exceed the production of Tesla's California factory. Analysts point out that the vast market and localized production make building a factory in China the best choice for Tesla at present.
German luxury car manufacturer BMW will take majority control of its main Chinese joint venture, BMW Brilliance Automotive, becoming the first foreign car company to complete this measure. BMW will pay 3.6 billion euros (4.2 billion US dollars) to increase its shareholding in Brilliance BMW from its current 50% to 75%. This transaction will be completed in 2022, when China will lift the ownership cap for foreign companies. BMW also stated that the term of the joint venture will be extended from 2028 to 2040, and plans to increase investment of 3 billion euros in China. The annual production capacity of BMW Brilliance will increase to 650000 vehicles from the current 520000 vehicles.
French automaker Renault SA announced on Thursday that it has signed agreements with EDF, Total, and Enel SpA as part of its development of electric vehicle infrastructure. Renault will collaborate with French Electric in electric vehicles and energy services. The two companies plan to expand their smart charging services to overseas French territories such as Corsica. Renault will develop an application with Total and its partner Jedlix to optimize electric vehicle charging, maximizing the benefits of renewable energy use and lower electricity prices.
Jaguar Land Rover, a British subsidiary of Tata Motors in India, announced a two-week shutdown due to declining demand. Jaguar Land Rover attributed its decision to shut down its English factory for two weeks this month to a 46% decrease in sales in the Chinese market in September. This factory produces its flagship model, the Range Rover.
Petrobras and China National Petroleum Corporation (CNPC) have signed an agreement to study the economic feasibility of completing the construction of the Comperj refinery in Rio de Janeiro. This marks another step forward for China towards establishing a foothold in the refining industry in the Americas. Once the research is completed, both parties will establish a joint venture to complete the construction of the refinery. Petrobras will hold 80% equity, while China National Petroleum Exploration and Development Corporation (CNODC), a subsidiary of China National Petroleum Corporation, will hold 20% equity.
Apple Inc. acquired a partial stake in German DialogSemiconductor Plc (DLGS. DE) for $600 million to expand the company's chip business in Europe while ensuring the German listed company's position as an Apple supplier.
Aluminum Co. of China Ltd. signed a preliminary agreement on Thursday to acquire partial equity in a $850 million aluminum refining project in Indonesia. The other joint venture parties of the project are PT Indonesia Asahan Aluminum, a state-owned enterprise in Indonesia, and its subsidiary PT Aneka Tambang. The aluminum smelter will be built in Manpawa, West Kalimantan Province, with an annual production capacity of 1 million tons. It is expected to be put into production in early 2021.
Chinese internet giant Alibaba Group Holding Ltd. announced on Friday that it has officially established a local lifestyle service company, completing a major layout in the large consumer sector and demonstrating another push for the new retail strategy in the local lifestyle service sector. The newly established company is formed by the merger and integration of Ele.me and Koubei, which focus on two main scenarios: delivery and in store. It has already served 3.5 million merchants in 676 cities. Wang Lei, a partner of Alibaba Group, will serve as the President of Alibaba Local Life Service Company and also serve as the CEO of Hungry Mai; Alibaba Group Vice President Fan Chi will continue to lead the word-of-mouth business.
Sony Mobile Communications and Sharp announced on the 11th that they will release new smartphones with organic EL panels on their screens for the first time among domestic manufacturers. The characteristic of the slim organic EL smartphone is that it can enjoy high-definition images and will compete with leading overseas companies. Sony's 'Xperia XZ3' is aimed at KDDI (au) and SoftBank and will be released in early November, with a screen size of approximately 6 inches. Sharp's 'AQUOS zero' will be released to SoftBank after early December, with a screen size of approximately 6.2 inches. Sharp produces screens by its own company, while Sony purchases them from overseas manufacturers.
Wal Mart Inc. has reached an online video content cooperation agreement with Hollywood film company MGM and interactive video startup Eko, which is one of the measures taken by the world's largest retailer to enter the entertainment field. Earlier this week, Wal Mart reached an agreement with MGM Holdings Inc. to produce exclusive original content for its on-demand streaming service Vudu. Wal Mart acquired Vudu in 2010. In addition, Wal Mart will also establish a content joint venture with Eko, a video platform specializing in entertainment and commercial content.
SoftBank Group has selected five investment banks, including Nomura Securities and Goldman Sachs, as the lead underwriters for its initial public offering of its Japanese telecommunications business unit. Softbank's Japan Telecom business unit plans to sell approximately 3 trillion yen (approximately $27 billion) of stocks, which will be listed on the Tokyo Stock Exchange in December of this year.
Huawei and German car manufacturing company Audi have officially announced their next cooperation plan in the field of intelligent connected vehicles, and have demonstrated their leading technologies through the latest Audi Q7. Through the joint efforts of technical personnel from both Huawei and Audi, the Huawei MDC mobile data center has been integrated into the Audi Q7 prototype car for operation in urban autonomous driving environments.
Chinese telecommunications giant Huawei has released two new computing chips, the Shengteng 910 and Shengteng 310, to drive artificial intelligence applications (AI). This is the first time the company has brought AI chip technology that can rival Western chip giants to the market. Shengteng 910 supports full scene AI applications, while Shengteng 310 is mainly used in low power consumption fields such as edge computing. Huawei's two AI chips are not sold separately to the outside world, but are sold to third parties in the form of AI acceleration modules, AI servers, and cloud services.
AbbVie has announced a settlement agreement with Novartis' Sanders regarding the patent dispute over the arthritis treatment drug Shumeile. According to the agreement, Sanders will pay the undisclosed amount of patent fees to Abbott, in order to obtain the non-exclusive patent authorization of Xiumeile and sell the biological similar drug Hyrimoz. The sales licenses for most European countries will take effect on October 16th, while licenses for the US market will take effect on September 30th, 2023.
China's large real estate company Greenland Holdings has released its mid-term strategic plan, aiming to maintain an average annual sales volume of over 500 billion yuan in the next three years, a 25% increase from this year's sales target. And the company will establish three major industrial groups: large infrastructure, commerce, and hotel tourism, with the mid-term goal of becoming a trillion dollar enterprise. Last year, Greenland achieved a contract sales amount of 306.47 billion yuan, a year-on-year increase of 20.2%; This year, the company's sales target is 400 billion yuan, with a year-on-year growth rate of 30%.
The China Securities Regulatory Commission has disclosed that it has accepted the application materials of JPMorgan Chase for the establishment of a foreign-invested securities company. JPMorgan Chase is one of the largest comprehensive banks and multinational financial services institutions in the United States. JPMorgan Chase and First Venture registered a joint venture securities firm, Yichuang Morgan, in China in 2010, with a shareholding ratio of 33.3%. However, due to poor performance, they announced their withdrawal in 2017. In April 2018, the China Securities Regulatory Commission announced the 'Management Measures for Foreign Invested Securities Companies', which allowed foreign investors to hold up to 51% of the shares. JPMorgan Chase subsequently submitted application materials in May, seeking to establish a foreign-invested securities company, and plans to gradually achieve full ownership in the future. Previously, applications from Swiss Bank and Nomura Securities have been accepted and a written feedback has been received.
Lotte Mart may completely leave the mainland Chinese market within the year. Lotte Mart, a retail supermarket under Lotte Group, announced the sale of 93 stores in China to Liqun Holdings and Wumart Group. The remaining 12 stores that could not be sold are also planned to be completely closed within the year. Meanwhile, both Wumart and Liqun do not use Lotte Mart as a trademark, which means that Lotte Mart, which entered China in 2008, will completely bid farewell to the Chinese market. This is not the first foreign retailer to lose out on the Chinese market, as eBay, also a South Korean business giant, has already learned a lesson from withdrawing from the Chinese market. The changes in the environment and the competition in e-commerce are all the reasons why Korean retailers are disappointed in China.
Chinese home appliance giant Qingdao Haier Co., Ltd. stated that the German Federal Financial Supervisory Authority has recently approved the company's D-share prospectus, which means that the work is the first D-share and Qingdao Haier has completed the necessary approval procedures. According to the plan, the expected offer for Qingdao Haier's D-shares is scheduled to take place from Monday to Thursday, and trading is expected to begin next Wednesday (24th).
Mitsubishi Hitachi Power Systems (MHPS) announced on October 12th that it had delivered steam turbines for Unit 1 to Sanmen Nuclear Power Co., Ltd., the operator of Sanmen Nuclear Power Plant in Zhejiang Province, China. This is the first time Mitsubishi Hitachi Power System has received an order for nuclear power related equipment from China.
Hitachi will collaborate with General Electric (GE) in the United States to develop nuclear power plant units using new reactors, striving to achieve the practicality of a new generation technology known as Small Modular Reactors (SMR) with an output power of approximately 300000 kilowatts. This type of unit is considered low cost and high safety, and is planned to be commercialized in the 2030's