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As part of our ongoing research into Chinese acquisitions in Europe, Datenna decided to highlight and research remarkable cases. This case considers the acquisition of the Swiss company Mistral Engines (MESA).
In 2014 Guangdong Yilipu Electric (known as Elecpro) acquired 85.6% of the shares of Mistral Engines SA (MESA) for 21,9 million rmb (approximately 2,5 million euro). They also acquired the technical assets and prototypes of the German SkyTRAC/SkyRIDER coaxial twin-rotor helicopter project for another 2,5 million euro.
In preparation for these deals Elecpro incorporated AeroSteyr Rotary Sàrl in Switzerland and Elecpro International Investment Holdings Company Limited in Hong Kong.
Elecpro used to be solely focussed on producing and selling ricecookers, water boilers and other small household appliances. In 2013 they set out a strategy to expand their business to the aviation industry. They bought their sister company Deao Helicopter Co from their parent investor Beijing Wutong Xiangyu Investment Co. In June 2015 Guangdong Yilipu Electric (Elecpro) changed its name to DEA General Aviation, and officially expanded its business scope from household appliances to aviation.
Mistral Engines develops and manufactures engines for light aircraft, helicopters and unmanned military vehicles. It has wholly-owned subsidiaries in the United States and France. By acquiring the Swiss and German technology, DEA General Aviation not only inherits the historical evolution of the product’s airworthiness certification in European and America, but also directly owns the core technical assets of coaxial twin-rotor helicopters and aero engines.
Since unmanned aerial vehicles (drones) can also be used for military applications, this business part cannot be sold to the Chinese company. This part of the company was supposed to be separated upon the acquisition. However, the engine is a typical dual-use technology that allows the same engine to be used regardless of military or civilian applications.
DEA General Aviation is listed on the Shenzhen stock exchange. The majority of the shares are publicly traded. The largest shareholder is Beijing Wutong Xiangyu Investment Co (24,66%). This investment company is ultimately owned by several private persons. The other shareholders can all be traced back to private persons as well. There are no government related investment funds as shareholders in the company. DEA General aviation is the sole owner of Deao Helicopter Co.
Deao Helicopter Co (a subsidiary of DEA General Aviation) is the agent of Schiebel’s S-100 UAV in China. They are responsible for sales and after-sales service, as well as spare parts supply and special purpose modification.
The unmanned drone has a wide range of applications, including resource surveys, traffic safety, fire warning, long-distance line inspections, communication relays, environmental monitoring, border patrols, disaster relief, anti-terrorism and anti-riot, anti-narcotics and other military and civilian applications.
In 2015 DEA General Aviation used its German subsidiary Rotor Schmiede GmbH to acquire XtremeAir for 3.6 million euros. They produce EASA certified full-carbon aerobatic and sport aircrafts and provide technology for fixed-wing aircrafts. In 2016 DEA General Aviation used another German subsidiary (AeroSteyr Engines GmbH) to acquire Hirth GmbH, a UAV propulsion specialist offering 2 to 4-stroke engines for UAV and ultralight applications for 4.5 million euros.
The aviation sector has been a strategic sector for technology acquisitions. Already in 2009 China’s state-owned AVIC (Aviation Industry Corporation of China) acquired Austria’s Fischer Advanced Composite Components and in 2013 they acquired Germany’s Thielert Aircraft Engines.
This case study is part of our ongoing research initiative investigating Chinese state-influenced acquisitions in the EU. The aim is to provide greater transparency on Chinese investments in Europe and the links with the Chinese government. It currently covers the period from 2010 to the present. Our findings are displayed on an interactive map.
The map utilizes our CUBO database to establish the degree of governmental influence in the acquiring company. It will be continuously updated.