Chinese cookware manufacturers are accusing Tefal brand owner Groupe SEB of trying to bankrupt their industry as the French giant seeks to take over Zhejiang Supor Cookware Co, China’s largest cookware manufacturer and one of its biggest producers of small kitchen appliances.
In a deal worth US$296m, Supor has agreed to sell a 61% stake to Groupe SEB in a three-stage transaction. Supor says the transaction will allow it to expand its overseas market via SEB’s global sales network, while SEB will be able to take advantage of Supor’s competitive edge.
However, rival Chinese cookware manufacturers are up in arms over the deal, which they say could create a monopoly. ASD, China’s third-largest cookware company, has vowed to join forces with other firms to ask the government to block the acquisition.
Chen Meirong, ASD’s deputy general manager, said the acquisition could “bankrupt most of the country’s cookware manufacturers. China’s cookware industry is now taking off after 10 years’ rapid development. Supor and ASD have the capability to compete in the international market. I’m worried that SEB’s takeover will mean the end of this.”
SEB will introduce new technology and manufacturing equipment to Supor. But said Chen: “Supor doesn’t need technologies from SEB because it has developed strong research and development capabilities.” He said the real reason behind SEB’s purchase was to put its increasingly-powerful Chinese rivals out of business. “They buy you and let you die,” he said.
The China Cookware Association is also suspicious of SEB’s intentions. Secretary-general Shi Shenglan said Supor had become a household name and represented China in the global market.
“But now it’s gone. Foreign companies are worried their Chinese counterparts will become their global competitors. For them, the best way to avoid that challenge is to buy them and let their brands disappear,” she said.
Supor’s sales soared 66.39% to US$187m in the first half of this year, mainly as a result of new products and growing exports.