Ingram's Chinese takeover hits bump in the road

Shanghai Stock Exchange questions HNA Group's buyout of world's largest IT distributor

The $6bn (€5.4bn) buyout of US distribution giant Ingram Micro by Chinese conglomerate HNA Group has been questioned by the Shanghai Stock Exchange over the broadliner's financial performance.

The exchange noted that Ingram Micro's net profit margins had buckled between 2013 and 2015 and requested explanations for the performance shortcomings, reported the Wall Street Journal.

The US distribution giant ended 2015 with Q4 sales plunging by nearly a fifth year on year, wiping $1.7bn from its top line.

HNA subsidiary Tianjin Tianhai was asked to explain how the deal with Ingram would affect the distributor's credit rating. The investment company was also asked how it planned to repay debts amounted through bank loans funding the acquisition and how this would affect its financial performance, the WSJ claims. The Shanghai Stock Exchange has also reportedly asked why Ingram's profit margins have been lower than its chief rivals' over the past three years.

Tianjin Tianhai is also being asked for more details regarding a lawsuit filed against Ingram by one of its shareholders, claiming the distributor "sold itself too cheaply and via an unfair process".

The stock exchange's concerns, voiced in a letter to Tianjin Tianhai, has caused the firm to delay its scheduled shareholder meeting to approve the deal until 29 July.

The acquisition, which was announced in February and was approved by Ingram's shareholders last month, is expected to close later this year.