Ingram Micro Acquired For $6 Billion

Ingram Micro Inc., the technology distributor is being acquired by an unit of Chinese conglomerate, the HNA Group for approximately $6 billion.

Upon closing, Ingram Micro will become a part of HNA Group, a Hainan-based Fortune Global 500 enterprise group and the largest stockholder of Tianjin Tianhai. The deal, representing a 39 percent premium to Ingram Micro’s 30-day average closing stock price, has been approved by both companies’ boards, they said.

In turn, Ingram will help HNA gain access to business opportunities in emerging markets, which HNA said have higher growth rates and better profitability.

A clerk counts stacks of Chinese yuan and USA dollars at a bank on July 22, 2005 in Shanghai, China. The deal will also bolster HNA Group’s logistics arm with Ingram’s supply chain network.

In recent months, Chinese companies have been on the hunt for foreign acquisitions, in order to offset the effects of a stalling domestic economy.

The Ingrams’ history with what is today publicly traded Ingram Micro dates back to 1985, when Ingram Industries bought software distribution businesses in Buffalo, New York, and Southern California. Further, it provides mobile handsets, tablets, navigation devices, aircards, SIM cards, flash memory, and other mobile companion products; supply chain, bid and inventory management, integration, technical support, training, financial and credit, marketing, marketing agency, business intelligence and analytics, e-commerce, managed, cloud, managed print, solution center, professional, and mobility device lifecycle services.

HNA Group is “committed” to maintaining Ingram’s leadership teams, Monié added.

Ingram expects to remain headquartered in Irvine, Calif., with Ingram’s executive management team in place, including Monié continuing as CEO. Shares of Ingram Micro soared 24% in after-hours trading on the news. In 2015, the distie reported $31.7 billion in revenue for the first three quarters of the year, down 2.5 per cent from 2014.

The deal is expected to close in the second half of 2016. Subsidiary Tianjin Tianhai, originally a maritime shipping company, is seeking to transform itself into a logistics firm.

As part of the deal, Ingram Micro will suspend its quarterly dividend payment and its share repurchase program, it said.