Analysts have questioned the impact Ingram Micro's takeover by a Chinese conglomerate will have on its business, particularly with US government customers.
On Wednesday night, Chinese aviation and shipping giant HNA announced plans to buy Ingram Micro for $6bn (£4.2bn). UK channel players were positive about the move and said such a big, global transaction helps put the IT channel on the map.
The move came as a surprise to some, including Context's founder Jeremy Davies.
"I thought good grief, it is mind boggling," he told CRN. "It's the sort of thing you would never expect to happen – a distributor of that size going over to the Chinese."
Davies said that certain organisations – especially those in the US government – that work with Ingram might be put off by the news.
"Once you get your brain around [the news], you wonder why," he said. "I am not a fly on the wall; I don't know why they would have done this at all. Then I think of the implications. I remember when IBM sold the PC [business] to Lenovo – [it made me think] what are the implications in terms of Ingram's business with government departments in different countries? I don't know if Ingram has business with the US government, but I am absolutely sure that if you think about it, any sensitive or 'let's work with a US company' policy, Ingram has got to be prejudiced from that point of view."
Westcoast boss Alex Tatham told CRN yesterday that some Americans "might get a bit tiddly" about Ingram having a Chinese owner, but said that shouldn't be the case anymore because "we live in a global economy".
Analyst GfK's supply chain director Carl West said while the impact on US government customers is a concern, "eastern investment in NASDAQ is considerable". He added that the HNA takeover might mean Ingram is encouraged to choose eastern vendor brands over western ones in the future.
In 2014, the US government placed a ban on Chinese telecoms firm Huawei bidding for government contracts over fear of espionage. Analyst Quocirca's founder Clive Longbottom said this might have implications for the Ingram takeover.
"They've had problems in the past with Huawei where they have said 'we won't use this stuff'," he said. "They could get very snippy about it.
"[HNA] want to make sure they can get a really good 'in' to the western market. I think the biggest problem they could have is that the American government could look at it and say 'we're not buying anything from Ingram any longer in case the Chinese parents start to do something nasty with software and so on'. I think we will have to see."
Longbottom stressed that in his opinion, "for the average buyer, it will make no difference".
Context's Davies added that although he is not sceptical about Ingram's plans, he cannot see the rationale behind it.
"The other thing must be why would one want to sell a business that is going reasonably OK to a Chinese conglomerate? I am bemused," he said.
"I am trying to rationalise the whole thing. In the hardware arena, if someone said Dell is selling the PC business, it would make sense – it is low margin, high volume and commoditised – it would be OK to push it over to companies who know how to make money from that. But distribution is not a commoditised product. Especially the way distribution is going today, especially in cloud. It is not just pick, pack and ship like it was 20 years ago. Cloud is a huge factor – what's going on with that thinking? Is it 'we can't make it in a cloud environment?' I don't know; I am bemused.
"Why on earth would they do it? OK, there was talk in the press release about synergies, but when the chips are down, what was driving that decision to sell this company to a Chinese conglomerate that doesn't even do distribution?"
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