The Chinese government is preparing to take over HNA Group, a struggling conglomerate that owns U.S.-based technology distributor Ingram Micro, according to Bloomberg News. What would the move potentially mean for Ingram and its partners? Here’s the background.
“An official takeover would mean ownership changes at its foreign affiliates and subsidiaries. Would Ingram Micro Inc., the Irvine, California-based electronics distributor HNA bought in 2016, effectively become a Chinese state-owned enterprise? And if it did, would the company then have to go back to the Committee on Foreign Investments in the U.S. for approval?
Under its existing agreement with CFIUS, Ingram Micro is required to operate as a standalone company, and is subject to annual audits of its compliance with certain operating and security agreements, according to Moody’s Investors Service. The company’s board composition is governed by an agreement with CFIUS and the U.S. Defense Department.”
Ingram Micro Perspectives
In response to the report, ChannelE2E pursued comment from Ingram Micro. A spokesperson for the distributor told ChannelE2E:
“We don’t comment on rumors and speculation. There’s nothing new to report but you’ve seen the headlines. We believe this is all related to issues with the aviation portion of HNA’s business and has nothing to do with Ingram Micro.
It’s also important to remember the points we’ve shared when previous rumors surfaced that give us confidence that there will not be any impact to our business. You’ve heard this from Paul Bay previously as we’ve shared with you when we became part of HNA Group in December 2016: Ingram Micro operates as a separate standalone company that has effectively ring-fenced or isolated its business to significantly minimize impact from any issues experienced by HNA or its affiliates.”
“The US government mandates that we must continue to run our business as a standalone company consistent with our pre-HNA acquisition practices. So any change in our ownership does not impact the fact that Ingram Micro maintains independent operations and financial strength. It’s business as usual here, and remains business as usual.”
HNA Group and Ingram Micro: Asset Sale Rumors
HNA Group acquired Ingram Micro in 2016 for $6 billion in cash. The distributor’s U.S.-based executive team has maintained its autonomy, and Ingram Micro’s overall business has generally performed well in recent years — including continued growth of its cloud services unit.