In 2017, the lithium battery industry experienced a surge in investment and mergers and acquisitions, with over 30 major deals reported. While some of these transactions succeeded, many failed due to various challenges. This article explores the top ten failed lithium battery mergers and acquisitions from that year, analyzing the reasons behind their collapse.
1. **Siu Xin Shares Abandons Alibaba and Huiqiang Acquisition**
On August 14, 2017, Siu Xin announced the termination of its acquisition of Alibaba shares due to disagreements on pricing and valuation. Later, it also abandoned its plan to acquire Huiqiang New Materials, citing differences in core terms. The company shifted focus to other investments, including potash fertilizer and lithium projects.
2. **Xianfeng Holdings Ends Talks with Huitong Tianxia and Miaosheng Power**
Xianfeng Holdings terminated its acquisition of two power battery companies after failing to agree on key terms such as price and structure. Despite initial interest, the deal collapsed after months of negotiations, highlighting the risks of acquiring high-potential but volatile targets.
3. **Aojia Jia Abandons Jiangsu Haisida Power Acquisition**
Aojia Jia planned to acquire Jiangsu Haisida Power for 2.5 billion yuan, but the deal was called off due to changing market conditions and policy shifts. The performance commitments set by Haisida were seen as too ambitious, especially amid declining subsidies and rising costs.
4. **Changxin Technology Fails to Acquire BAK Battery**
Changxin Technology had been negotiating the purchase of BAK Battery for over a year but eventually walked away. The performance guarantees required were deemed unrealistic given the industry’s economic pressures. However, the company plans to revisit the deal in the future.
5. **Qunxing Toys’ Third Failed Acquisition**
Qunxing Toys attempted to acquire space-time energy for 2.9 billion yuan but failed due to disagreements on the transaction price. As a frequent acquirer, this marked the third failed restructuring since 2014, reflecting the intense competition and pressure in the new energy sector.
6. **Shengyang Shares Abandons Lithium Battery Investments**
Shengyang Shares had planned to invest 850 million yuan in two lithium battery companies but halted the deal due to policy changes. The target companies did not meet pre-agreed conditions, leading to the decision to terminate the investment.
7. **Golden Crown Electric Gives Up on Lithium Material Acquisition**
Golden Crown Electric initially aimed to acquire both a diaphragm and a lithium material company but ultimately chose only the diaphragm business. The decision reflected strategic adjustments in response to market trends and internal priorities.
8. **Snowlight Abandons Shenzhen Snow Acquisition**
Snowlight initially targeted Shenzhen Snow but later shifted focus to another power battery company. The deal was eventually terminated due to disagreements on pricing, showcasing the volatility of M&A deals in the lithium sector.
9. **Del Terminates Acquisition of Yiteng New Energy**
Del’s acquisition of Yiteng New Energy was stalled due to a judicial freeze on the equity of a major shareholder. The company decided to abandon the deal, citing unresolved legal issues and uncertainty about the target’s performance.
10. **Western Mining Ends Qinghai Lithium Acquisition**
Western Mining abandoned its plan to acquire Qinghai Lithium due to complications with mining warrants. The company shifted focus to acquiring Daliang Mining through cash rather than shares, demonstrating flexibility in its M&A strategy.
**Conclusion**
2017 was a transformative year for the lithium battery industry, marked by aggressive M&A activity and intense competition. While many companies sought to expand rapidly, the failure of several deals highlighted the importance of careful planning, realistic valuations, and alignment with market conditions. As the industry continues to evolve, companies must remain vigilant and strategic in their acquisition decisions to avoid costly missteps.
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