Ingram Micro $6bn sale to Chinese logistics biz delayed

Bumps on road ahead? 'We'll be flogged this year' say execs at globe's largest distie

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Ingram Micro has pushed out the completion date of its $6bn sale to Chinese logistics provider Tianjin Tianhai to let the Committee on Foreign Investment in the US (CIFUS) review national security implications.

The world’s largest tech distributor said last night the “end date” to conclude the deal had been “extended” to 13 November.

“The extension was made pursuant to the merger agreement among Ingram Micro, Tianjin Tianhai and GCL Acquisition Inc, and will allow for completion of the previously announced review of the transaction by the CFIUS.”

Under a “joint voluntary notice”, Ingram and its buyer last month contacted the CFIUS, an inter-agency committee that works on behalf of the US government, to probe the proposed buy-out.

Originally, Ingram said it didn’t believe the CFIUS would look into the agreement because the distributor only sells tech rather than making its own.

The CFIUS typically take 30 days to rubber-stamp a transaction or opt for statutory investigation, and if it opts for the latter has another 45 days to decide to permit the acquisition or order divestment.

These things aren’t always clear cut - in 2012 some 40 per cent of the 114 cases that went before the CFIUS were investigated, as were 48 of the 97 deals in 2013.

Tianjin Tianhai, which made the $6bn bid for Ingram in February, had expected its shareholders to vote on the proposal on 29 July but scrapped the meeting after the Shanghai Stock Exchange requested fiscal details.

The SSE wanted assurance over the financing of the transaction, the bank loan size, duration of repayments and if both firms could manage debt levels post deal. It also requested info on Ingram’s margins in relation to its peers, and questioned why rivals seemed more successful in that respect.

Ingram Micro shareholders approved the sale in June, as did the US Federal Trade Commission, an anti-trust authorities in China, Canada, India, Mexico, South Africa and Turkey.

The US firm reiterated last night that it still expects the sale to close in 2016. If the buy is cancelled then Ingram is set to receive $400m from Tianjin Tianhai under the terms and conditions. ®


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