SMM News: Heng Tong Optoelectronics acquisition of Huawei Ocean 51% stake ushered in significant progress. The company issued a public announcement on the evening of June 17, announcing that the board of directors and the board of supervisors approved the "plan for Jiangsu Hengtong Optoelectronic Co., Ltd. to issue shares and pay cash to buy assets." the company's shares will resume trading on June 18.
Notably, Huawei founder and CEO Ren Zhengfei also mentioned the deal on the afternoon of June 17, saying, "the sale of submarine cables is not because of the blow, but because it is not very relevant to the main business."
Hentong Optoelectronics plans to buy a 51 per cent stake in Huawei Ocean, which Huawei invests in, by issuing shares and paying cash, according to the plan. Among them, the company will pay no more than 70% of the transaction consideration by issuing shares, and the rest will be paid in cash, the specific proportion of which will be agreed separately by the two parties in a formal agreement. The valuation of the target company and the price of the transaction have not yet been determined.
At present, Hengtong optoelectronic submarine cable manufacturing industry has begun to take shape, in the international marine market to undertake submarine optical cable orders have exceeded 10,000 kilometers, successfully entered the international submarine optical cable market system, and become an international well-known submarine cable manufacturing enterprises. In addition, the company is also actively laying out the international offshore cable operation business, is currently promoting the construction of PEACE transoceanic submarine cable communication system operation project, and is currently promoting the construction of PEACE transoceanic submarine cable communication system operation project.
It is understood that the PEACE cable communication system, which covers a total distance of 15800 kilometers, is an important communications backbone connecting the Asia-Europe, Asia-Africa, and Africa-Europe economic corridors-and Huawei Ocean is the general contractor for the project EPC.
It is in this context, Heng Tong Optoelectronics want to make the "cake" bigger. "Huawei Ocean has good prospects for development." Heng Tong Optoelectronics said that after the completion of the transaction, the target company will become the holding subsidiary of the listed company, and its financial statements will be included in the merger scope of the listed company. It is expected that after the completion of the transaction, it will enhance the asset scale, operating income and net profit level of the listed company, which will help to improve the asset quality of the listed company, optimize the financial position of the listed company, and enhance the sustainable profitability and anti-risk ability of the listed company.
Huawei Ocean is an international advanced offshore cable communication network construction solution provider, has delivered a total of 90 projects, the scope of the project covers the world, the length of offshore cable construction of more than 50,000 kilometers.
Huawei Ocean, founded on January 25, 2008, is the world's fourth largest submarine cable engineer, mainly responsible for cable laying and maintenance, of which Huawei invests in 51%. The well-known British company Global Maritime Systems Co., Ltd. 49% stake-Heng Tong Optoelectronics is ready to take over Huawei's 51% stake in Huawei Ocean.
In an interview with the Securities Times e Company, some industry insiders said that Hentong Optoelectronics is ready to take a 51% stake in Huawei Ocean, which is equivalent to Hentong Optoelectronics undertaking the relevant business from Huawei as a whole. "Huawei Ocean is a key sector created by Huawei, and now Hentong Optoelectronics is also further doing this business. If the acquisition is finally completed, Heng Tong Optoelectronics can further improve the industrial chain. Further strengthening the voice of the industry, while Huawei will further focus on terminal equipment, which is happy for both sides. "
Ren Zhengfei said on June 17 that Huawei wanted to sell some of its submarine cable business a long time ago. Huawei will not split up or lay off staff on a large scale in the future, but business consolidation has been under way.