Chinese manufacturer enters European market via acquisition

USI’s subsidiary, Universal Global Electronics, has entered into equity transfer agreement with Chung Hong Electronics (Suzhou), intending to acquire its entire 60% stake in its Polish subsidiary Chung Hong Electronics Poland for RMB 78 million (EUR 9.85 million), the company states in a press release. It is also stipulated in the agreement that within six months after the audit of financial statement of the Polish subsidiary for the year ended 2020, Universal Global Electronics can acquire the remaining stake in such subsidiary at 10 times the static P/E ratio. Following the completion of the acquisition, USI will have a production base in Poland to expand its footprint in Europe enabling the company to build a much more complete global supply system. USI says that in the context of the intensifying trade war between China and the United States, the completion of the acquisition is of “symbolic significance” to the business expansion and accelerated development of the company. The plans for the new European production base is to have it focus on automotive electronics, and in the future expand to roll-out industrial and server products, the press release continues.