Assa Abloy's China Write-Down Highlights Risks of Serial Acquisition Strategy
Assa Abloy's substantial impairment on its China business highlights the risk of light due diligence from an intense pace of acquisitions. That said, the share price sell-off looks overdone to us relative to the news. China accounts for just over 5% of group revenue, and weakness in that business is not new news. The heart of the problem seems to be that Assa made its China acquisition at the peak (that's obvious now with the end of the real estate boom now fully visible in the rearview mirror) ...ASSA ABLOY provides a range of door opening solutions. Co. is organized into five divisions. Europe, Middle East and Africa division, Americas (North and South America) division and Asia Pacific (Asia, Australia and New Zealand) division manufacture and sell mechanical and electromechanical locks, security doors and hardware in their respective geographical markets. Global Technologies division operates worldwide in the product areas of access control systems, secure card issuance, identification technology and hotel locks. Entrance Systems division is a global supplier of entrance automation products and service.
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