By King & Wood Mallesons
31 July, 2015, with King & Wood Mallesons’ (KWM) legal support, Qingdao Hisense Electronic Equipment Co., Ltd. (Hisense) and its affiliated company in the USA signed a Share Purchase Agreement and a Trademark License Agreement with Sharp Corporation (Sharp) in relation to Sharp’s facility in Mexico. Under these two agreements, Hisense will acquire 100% of Sharp Electrónica México S.A. de C.V (Sharp Mexican Company), Sharp’s TV production facility in Mexico, with a consideration of US$23.7 million. The transaction will also give Hisense the rights to use the Sharp’s brand and its marketing channel resources in the Americas (except in Brazil).
Hisense is a leading listed home appliances company in China. The acquisition of Sharp Mexican Company is a milestone transaction for Hisense, which will accelerate its globalization, while strengthening the alliance and exchange of technologies, products and markets between the two parties. The transaction also supports Hisense’s overall global business objectives.
KWM acted as the legal counsel for Hisense, with Beijing-based partner Guo Guiying leading the team. The team of partner He Wei took charge of the intellectual property issues of the transaction. The KWM team provided a full range of legal advices required for a successful execution of the transaction with regard to the due diligence, design of transaction framework, draft and negotiation of the transaction agreements. Currently, it is in the stage of merger control filing process in Mexico. With the cooperation of Mexican counsel, KWM team acted as the general coordinator of this transaction and provided the solutions to complex legal questions relating to the Mexican Maquiladora (IMMEX) program, Customs policy, ownership of the real estate, trade mark license and the compliance of local environment law, which lays the foundation for the seamless transition and the successful operation of the production facility. Furthermore, given the large number of the employees hired by Sharp Mexican Company, KWM team and the Mexican counsel advised on the whole arrangement to retain the employees.
This deal has once again demonstrated KWM’s professional skills to provide the one-stop-service for outbound investment. This deal is also a good precedent for Chinese enterprises to make further investment in Mexico and North America.