In a significant move within the automotive media landscape, the rumor of Haier Group's acquisition of Autohome has finally materialized, creating ripples in both the automotive and tech sectorsOn the evening of February 20, 2023, Autohome Inc., a notable player in the automotive media market in China, released an official announcement regarding a substantial transaction involving its major shareholder, Yun Chen Capital Cayman, a subsidiary of China Ping AnThe agreement stipulated that Yun Chen Capital would sell a 41.91% stake in Autohome to CARTECH HOLDING COMPANY, a subsidiary of Haier Group, for approximately $1.8 billionAs a result of this deal, CARTECH HOLDING will emerge as the new controlling shareholder of Autohome.
The announcement was accompanied by a shift in Autohome's managementWu Tao, the executive director and CEO with ties to China Ping An, chose to resign from his positionHe will be succeeded by Yang Song, the former senior vice president, who takes on the roles of both executive director and CEOThis transition highlights a crucial reshuffle in Autohome's leadership structure following the shift in ownership.
On the same day, Autohome's stock closed at HKD 60 per share on the Hong Kong Stock Exchange, reflecting a modest increase of 0.083% and valuing the company at approximately HKD 30.6 billionThe price paid by Haier for the stake represented a premium over the market value, indicating the growing interest from technology firms in expanding their footprints in the automotive sector.
Founded in 2005 by Li Xiang, who later became notable for founding Li Auto, Autohome rose to prominence as one of China’s leading automotive online platforms, offering a mix of vehicle buying guides, reviews, and multimedia content to car enthusiasts and prospective buyers alikeOver the years, Autohome has seen various ownership changesFollowing a financial crisis in 2008, it brought in significant investors like Australia Telecom, which at one point owned 75.1% of the company
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It later went public on NASDAQ in 2013 and secured a secondary listing on the Hong Kong Stock Exchange by 2021.
By late 2023, China Ping An, through Yun Chen Capital, controlled a significant 44.13% of AutohomeHowever, this relationship shifted again as Ping An started planning its exit, which has led to this current acquisition by Haier GroupUnder the terms of the deal, Haier will acquire 201 million shares, and Yun Chen Capital will retain a small stake of 24 million shares post-transaction.
Notably, the acquisition price was above market valueWith Autohome’s stock closing at HKD 60, the price for the new shares translates to about HKD 120.53 billion or approximately $15.5 billionThe $1.8 billion price for a 41.91% stake signifies a premium of around 16%, suggesting Haier's confidence in Autohome's future potential.
If the acquisition proceeds successfully, Autohome is set to become the eighth publicly listed company under the Haier umbrella, which already includes key players like Haier Smart Home and Haier BiomedicalThis expansion strategy is part of Haier's broader aim to leverage its diverse holdings and synergies across sectors.
In recent years, Haier has aggressively pursued growth through acquisitions and reorganizations, and this latest move is a testimony to their ambitionTheir current portfolio boasts six public companies along with ongoing expansion efforts, such as acquiring control over New Times, an intelligent manufacturing companyHowever, Haier's endeavors have not always been seamless; plans for merging Haier Biomedical with another major player encountered setbacks, showcasing the challenging nature of corporate consolidation.
The acquisition of Autohome is particularly strategic for Haier as it seeks to enhance its automotive business footprint developed over the past decadeStarting in 2015, Haier began establishing partnerships in the automotive sector, including a significant collaboration with Faurecia, a global automotive technology company
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In 2017, it launched its industrial internet brand, Kaos, which aims to provide innovative solutions tailored for the automotive industry, such as battery management systems and assembly line integration for electric vehicle components.
Following the establishment of Kaitech in 2022, another subsidiary focused specifically on the auto industry ecosystem, the acquisition of Autohome will significantly augment Haier's capabilities in areas like used car trading, customized vehicle solutions, and charging infrastructureAccording to a post on Haier’s official WeChat account, integrating Autohome into the Haier broader strategy will help create a new ecosystem within the automotive industry, illustrating a vision where smart hardware integration and new retail models coalesce.
Over the last few years, Haier has ramped up its used car business through Kaitech, expanding its physical presence by acquiring various used car dealerships, with 28 locations across major cities like Beijing and ChengduOnline, it launched a dedicated e-commerce platform for used vehicles, reflecting an adaptive response to changing consumer habitsAutohome, with an established reputation in the online automotive marketplace, also leverages its digital prowess in facilitating vehicle transactions and advertising for dealers, which complements Haier's physical dealership expansions.
Despite the potential and ambition behind this acquisition, Autohome has faced challenges stemming from increasing market competition and changing consumer preferences, leading to a downward trend in its financial performanceFrom 2021 to 2023, the company’s revenues have experienced fluctuations, with figures of CNY 7.237 billion, CNY 6.941 billion, and CNY 7.184 billion respectively, while net profits decreased to CNY 2.149 billion, CNY 1.807 billion, and CNY 1.880 billionAs of early 2024, Autohome's revenues dropped to CNY 7.040 billion, marking a 2.01% decline year-on-year, and its net profits fell by 13.86% to CNY 1.620 billion.
The challenges faced by Autohome highlight deeper issues within the automotive media sector, driven by intensified competition from both traditional and digital players
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