Chinese conglomerate HNA Group Co. is in discussions to sell Ingram Micro Inc., one of America’s largest distributors of personal computers and other technology products, to private-equity firm Apollo Global Management LLC, according to people familiar with the matter.
Apollo made an offer for Ingram two weeks ago, the people said, but HNA rebuffed it as too low. HNA is hoping to sell Ingram for $7.5 billion, including $1.5 billion in debt, one of the people said. Apollo and HNA are currently in talks to see if a deal can be reached, the people said.
Other U.S. private-equity firms have expressed interest in Ingram, though the Apollo discussions currently appear the most advanced, some of the people said. There is no guarantee any deal for Ingram will be reached.
A deal for Ingram, which a unit of HNA acquired for $6 billion about two years ago, would bring in billions of dollars at a time when the conglomerate is trying to downsize and raise funds to pay off debt.
HNA amassed piles of debt as it acquired assets around the globe worth more than $40 billion over a two-year shopping spree. That came to an end when the Chinese government cracked down on overseas investments by large private companies—driven by concerns that high levels of debt could pose a risk to the country’s economy.
The Chinese conglomerate also encountered scrutiny of its complicated ownership structure from U.S. regulators and global lenders. The company is now shedding assets to focus on its core area of aviation.
Apart from Ingram, the company is planning to exit stakes in Deutsche Bank AG and dozens of Chinese banks and insurance companies, The Wall Street Journal has reported. It already sold its investment in the Hilton hotel chain at a roughly $2 billion profit.
Founded in 1979, Irvine, Calif.-based Ingram is one of the largest distributors of personal computers and other technology products, including printers, scanners, TVs, video-game consoles, and software. It has more than 30,000 employees and has operations in 52 countries, according to its website. HNA didn’t make changes to Ingram’s senior leadership after the acquisition.
For the nine months ended Sep. 29, Ingram posted sales of $35.6 billion, up from $32.9 billion a year earlier.
Source: The Wall Street Journal
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