Core Viewpoint - The acquisition of Merck Group's surface solutions business (SUSO) by China's leading synthetic mica company, Global New Materials International, marks a significant shift in the global new materials industry, indicating a transition from "market for technology" to "technology wins market" for Chinese enterprises [1][2][4]. Group 1: Company Backgrounds - Merck Group, one of the oldest chemical and pharmaceutical companies, has evolved into a global pharmaceutical giant with revenues of €17.4 billion in life sciences and healthcare in 2024 [2]. - Merck's semiconductor solutions business accounted for 69% of its electronic technology revenue in 2024, while SUSO's contribution declined to only 11%, leading to its divestment [2][3]. - Global New Materials International, established in 2011, has rapidly grown to become China's largest synthetic mica and pearlescent pigment manufacturer, achieving revenues of ¥1.649 billion in 2024, a 55% increase year-on-year [7][18]. Group 2: Strategic Acquisition - The acquisition price for SUSO was €665 million (approximately ¥5.187 billion), with a valuation of 11.08 times EBIT for the 2023 fiscal year, significantly lower than initial estimates [16]. - Global New Materials International's confidence in the acquisition stems from its proprietary core technologies and strong financial performance, with a compound annual growth rate of approximately 27% over the past five years [17][18]. - The integration of SUSO is expected to enhance Global New Materials' production capabilities and market reach, leveraging SUSO's established global sales network and brand reputation [12][20]. Group 3: Market Dynamics - The global demand for synthetic mica is increasing, driven by its applications in cosmetics and automotive coatings, as natural mica faces supply constraints and regulatory challenges [3][4][22]. - The collaboration between Global New Materials and SUSO is anticipated to create a comprehensive product matrix that covers high, medium, and low-end markets, reducing reliance on low-cost competition [21][23]. - The strategic partnership is expected to enhance both companies' operational efficiencies, reduce procurement costs, and improve profitability, particularly in high-value sectors like automotive and cosmetics [13][20]. Group 4: Future Outlook - The merger is projected to lead to the formation of a global new materials industry group, enhancing the competitive positioning of both companies in the international market [21][24]. - The integration of technologies and resources is expected to foster innovation and expand market opportunities, positioning Global New Materials as a leader in the synthetic mica and pearlescent pigment sectors [23][24]. - The successful execution of this acquisition could serve as a model for other Chinese enterprises seeking to expand globally through technology-driven strategies [24].