When a deal as significant as the Ingram acquisition occurs, it is inevitable that a huge number of questions will be raised almost instantly.
To try to placate its vendor and reseller partners, the distribution giant released a list of FAQs.
We have picked the top 10 below.
1. Why is Ingram Micro selling itself? Why now?
• The board regularly evaluates opportunities to maximise value and believes that this transaction is in the best interest of our stockholders.
• We believe that the merger delivers near-term, considerable value to our stockholders at a substantial premium.
2. How did this transaction come about? Who reached out to whom?
• In connection with the merger and the related stockholder approval process, Ingram Micro will be filing a proxy with the SEC in the coming weeks which provides context about the background of the merger as well as the decision process of Ingram Micro’s board of directors.
3. What regulatory reviews are required?
• This transaction is subject to customary regulatory review including antitrust review in the US, EU, the PRC and other jurisdictions, as well as clearance by the Shanghai Stock Exchange and other applicable PRC approvals.
• We do not currently anticipate any major hurdles from regulatory reviews.
• The parties do not currently plan to file for CFIUS approval.
4. How is Tianjin Tianhai/HNA Group funding the merger? Are funding commitments already in place?
• Tianjin Tianhai/HNA Group will fund the merger using its own funds as well as proceeds from financing. Tianjin Tianhai/HNA Group has good working relationships with a number of Chinese banks and financing institutions.
5. Is there a breakup fee? What is it?
• There is an “interloper” break-up fee of $120m, but please refer to the transaction agreement that we expect to file shortly for further information regarding the merger terms.
• The merger agreement also provides that upon termination of the agreement under certain circumstances, Tianjin Tianhai would be obligated to pay Ingram Micro a termination fee, which will be equal to $200m if the agreement is terminated in the first 30 days after signing, $300m if the agreement is terminated between the 31st day and the 60th day after signing, and $400m if the agreement is terminated any time after the 61st day following signing.
6. What happens to Ingram Micro management?
• Our current management team is expected to remain in place and Ingram Micro will continue to be headquartered in Irvine, California, operating as a subsidiary of Tianjin Tianhai and as part of HNA Group.
7. What changes should vendors or customers expect when Ingram Micro is a part of HNA Group?
• We do not expect this merger to impact the way we do business together; it simply represents a change in our equity ownership.
8. Is this acquisition going to change your financial rating and ability to maintain your credit access and thus support the business?
• We will be engaging in discussions with the relevant ratings agencies regarding this merger in due course.
• Our expectation is that Ingram Micro will maintain a healthy balance sheet and a strong financial position that will provide our vendor and customer partners with the financial support and comfort they are accustomed to when doing business with Ingram Micro.
• HNA Group has assured us that it will not significantly change our capital structure and we expect to be able to leverage HNA Group’s financial strength.
9. Will the Ingram Micro name and brand stay the same?
• Ingram Micro’s name and brand are well regarded and are not expected to change as a result of this merger.
• HNA Group has assured us it is committed to maintaining Ingram Micro’s integrity and brand excellence.
• Our commitment to maintaining our trusted relationships with our vendor and customer partners is unwavering.
10. Will your business strategy change?
• We do not anticipate a change in our business strategy as a result of this merger. If anything, we will be able to accelerate our investments and execution.
• HNA Group has assured us it fully supports Ingram Micro’s strategic direction and is dedicated to offering innovative solutions across the IT ecosystem and providing a superior vendor experience.
• Innovation, new services introduction, brand management and ensuring the stability and continuity of the business operations they acquire are fundamental to HNA Group’s overall strategy.
• In fact, as a part of HNA Group, Ingram Micro expects to have the ability to accelerate our investments, both organically and through M&A; to enhance and add to our capabilities in high-value IT solutions, mobility life cycle services, commerce and fulfillment solutions and cloud; while also continuing to extend our geographic reach.
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