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REVIEW: We tried to identify and resolve such laws, and give more Chinese businesses to stay KAM: those their dreams of business, have equally foresight, why is falling into the many pitfalls of overseas mergers and acquisitions? Why do they fail? failed in what areas? and from those who have successful businesses who go out, and mergers and acquisitions across the threshold can find the answer?
for China's enterprises, how to go out? how to go out? This is indeed a serious and thought-provoking topics.
those glorious and tragic battle
5 years ago, was named , then, let TCL became the first martyr to eat crabs. behind, the same difficulties as the acquisition by Chinese enterprises, can open a long list: Lenovo, the cast, Haier, China trek in peace ... ... they have yet to find this feeling on the road, difficult and bitter to explore some the dream of the Chinese enterprises to go out.
this is indeed a very smooth journey. delicate political influence, hidden traps buried in underwater technology, the Western bias of public opinion, tough and unreasonable trade unions, too late to familiar rules of law, the endless labor disputes, shaped like a tasteless waste of assets, poor communication of the cultural conflicts ... ... and both are way ahead of the pit hole, the cruel, cold-blooded to swallow up not too strong corporate body, until the glorious and tragic who left the battle!
have such a set of data: the case of overseas acquisitions in recent years in China, 70% of Chinese companies ended in failure . For Chinese companies, how to go out? how to go out? how mergers and acquisitions to achieve maximum value? is indeed a serious topic but worth pondering. In this huge and complicated systematic project, we are always one is not Be careful to mistakes, somehow pay tuition. We saw the low price, but ignored the they accidentally stepped into a trap.
although this road has excellent breakout success for example, Huawei this horse, companies, through mergers and acquisitions Zoomlion become the boss of the international concrete industry, Geely reverse acquisition of DSI ... ... But compared to the large and frustrated legions of overseas mergers and acquisitions, the success set off in the midst of sorrow and lament the sound, actually is so pale and weak and are weak.
forward no matter how dangerous, but only go out to participate in the reconstruction of the international industrial structure, enhance the level of Chinese manufacturing enterprises, so that the distribution of China's enterprises in the world, various parts of the industry chain. So, more and more Chinese enterprises, like horses running as no turning back corner, a short step caused thousands of miles, and change is naive to the accumulation of experience in the course fee into forward momentum. today's world, has been unable to stop the flood of Chinese enterprises to the world and the dream of rejuvenating the Chinese nation.
so we try to identify and resolve such laws, and give more Chinese businesses to stay KAM: those who their dreams of business, have foresight as to why the numerous mergers and acquisitions, or fall into the trap? Why do they fail? failed in what areas? success from those who go out of business, people learn a lesson and can be found across the M & threshold answer?
Chinese companies often underestimate the risk, or just one-sided value of a particular aspect of the acquired companies, they are sometimes ill-prepared, or the acquired party and their environment, different cultural values, rules of law not through the ... ...
expedition: the fall of M & A Board
an amazing figure for Chinese companies who are very shocking: Ping M & Netherlands - Belgium Fortis Group, 8 months net loss of 15.7 billion yuan; TCL Thomson M & A, 3-year net loss of 40 billion yuan; in investments in U.S. investment group Blackstone Group, two billion U.S. dollars less than a year, has shrunk more than 70% ... ...
Obviously, Chinese enterprises in overseas mergers and acquisitions in the poor performance, so that China's going out of business prohibitive.
According to McKinsey's research in the past two decades, the global large enterprise merger, the expected results as the ratio of less than five, while China has Liucheng Seven overseas acquisitions successful. This shows that the global M & A is a complex and difficult task, but the high failure rate of Chinese enterprises had to sit back and let us Inquiry and reflection.
broadly similar pattern of success and failure for different reasons. Overseas M & A Why did I fail? failure of Chinese companies in overseas acquisitions where exactly? We may wish to clarify the reason for the failure:
1. the lack of effective The strategy, irrational temptations.
BenQ acquired Siemens mobile phone business, according to the agreement, pay only a small amount of the cost of BenQ, Siemens combined 100 million euros on account of cash, which makes BenQ feel completely accounted for a great deal, so they rush into the not very familiar with mobile phones. However, in the merger, they found the German people to pay high labor costs, until six months after efforts to introduce new models, the but half a beat slower than the market, this time the star models of Motorola V3, has already swept through the global mobile phone market. Two years later, BenQ - Siemens, the huge loss of 800 million euros in a rash after the bankruptcy.
All M & A should be around a certain strategic objectives, and value creation for the purpose of acquisition is by way of optimizing the allocation of resources to continue in moderate enhancement within the main business, resulting in integration synergies and create value greater than the independent s and the new value. However, BenQ's overseas mergers and acquisitions, corporate value too much the value of financial investments, while ignoring their own business strategy, the whole process of blind and aggressive acquisitions, failures can be imagined.
2. the lack of integrated control.
TCL Thomson M & A, the Li Dongsheng has promised 18 months of losses to the pronouncements of Europe. However, in the implementation process, the face of CRT updating technology and the integration of employees and other issues, TCL will still copy the Chinese approach to France. After three years, TCL full passivity in the European market, neither the open sale of the troubled situation, has failed on the original mess, companies contradictions within the relationship, financial, personnel, technology, management, brands, channels and other issues all come to the fore. that after the failure of Li Dongsheng laments: the habit of operation, TCL basically out of control. integration, the second is the integration of management systems, the integration of the three is the customer level. Typically, the integration after M & M can really decide is the key to success. TCL ex post full of holes, not one hundred, it is the apparent lack of integration skills, which usually overseas acquisitions of Chinese enterprises in a big common problem.
3. information asymmetry, lack of adequate understanding of the target company.
2001, the Holley Group Philips acquired the CDMA project in the United States. The CDMA technology to break the monopoly of the Holley was later found that they fell into an awkward hand, among the. First of all, Philips and Qualcomm CDMA chips on some cross-protocol and licensing agreement, the two sides undertake not to open a third party, Holley does not know. This determines the completion of the merger, although Holley, but in fact only got a Philips CDMA95A and 200001X phases of the technology, the core 3G technology is still control in the hands of QUALCOMM Incorporated. In the end, Holley's research and development still remain inherited from Philips is not much use of the 2G standard, while most countries in Europe and America well into the 3G era.
mergers and acquisitions, companies often refuse some of the goals of assets, loss of business, or the existence of hidden liabilities, the potential risk, so most of them are willing to sell at very low prices. because of information asymmetry, the acquiring party is often not to the assets of the acquired party status and accurately assess the financial situation, which undoubtedly increased the risk of acquisition. Similarly, M & A target of the host country's cultural, political, and legal research and the lack of adequate understanding, but also led to mergers and acquisitions One important reason for failure.
4. ignore the human factor within the enterprise.
SAIC merger Ssangyong, the first Ssangyong staff was opposed to. ex post SAIC to overreact to impose a sanction on a strong pressure. This enemy , is bound to go through a contact, conflict and adaptation process of interaction. especially for the entrants, should unite forces, in particular, to get the support of trade unions. handled properly, the enterprise often full of contradictions and gangs, causing friction . and the staff of the psychological contract is damaged, a lot is not conducive to the normal operation of merger integration and corporate behavior will occur in the organization, to the enterprise caused huge losses and the overall resources of the operating costs. speaking from the ownership structure, large shareholders have indisputable right to speak, but do not go trying to establish an absolute right to speak, notes, strong dragon snakes, but the truth of pressure.
5. attention to detail.
2005 年CNOOC acquisition of Unocal, first acquisition by the U.S. media leaks, and then within the specified time the best time to miss the offer, the United States Citroen hand, blending in, driving up prices. CNOOC's offer may not last no more out of the $ 12 per share, totaling billions of dollars. and then the acquisition of the critical moment, and other internal speech and made public by the media, which led to the cynical American politicians and their anger.
overseas mergers and acquisitions, for Chinese enterprises, often will be acquired in the public square in your area to deal with a critical eye. trumpeted in some countries, especially China threat theory of the moment, Chinese companies a little mistake, the other side will be enlarged view, or even rise to the political level. Therefore, in M & A process should be cautious, low-key, At the same time pay more attention in the details, not to give you leave to seize the opportunity to play Braid wantonly. The details are not only in word and deed, a sound legal system in Europe and the United States, taxation, environmental protection and other sensitive factors, handling the slightest mistake, the same may also Enterprise will bring disaster.
6. shortage of professionals to meet the poor.
Lenovo acquisition of IBM PC Division, the Ministry of the original cause of a gang of Chinese Senior sent to the United States, in charge of various important sectors. In order for them to work better, think of giving them a pay rise, broadly in line with the United States wages quite. As everyone knows, in the actual operation process, the gang crash transnational managers has not been able to find a better way, but also not really into the environment and the U.S. team to go, Lenovo huge loss is also reasonable.
compared with international multinational corporations, China business was too small, the lack of international experience, coupled with long-term work in the context of Chinese culture, resulting in a short period of time is difficult to adapt on the quality of personnel requirements of multinational operations, not much different way of thinking at work often not well into the role and deal more effectively with each other. expatriate personnel use.
Haier acquisition of Maytag, the Maytag, Iowa, where a local media, bit, a spokeswoman, the get is categorically rejected. The reporter asked how to contact senior Haier in China, when the answer is not known.
Haier America branch refused to be interviewed and uncooperative attitude, and soon came to light, and give local people a negative signal to pass, Haier is not friendly enough, and proud. This soon caused discontent Maytag local workers, then, Maytag union stand up position, Haier said they did not support the merger. many obstacles under the Haier bid for Maytag ultimately ended in failure.
Although mergers and acquisitions between enterprises appears to be happening, but the government sent everywhere in the West , the frequent change of political power state, how to obtain the confidence of the ruling and opposition parties, how to get the enterprise to be located public trust, and how to obtain the trust of the media, how to get the enterprise to be employees of the trust, which requires excellent communication skills means of coordination and the use of public relations. But unfortunately, most of Chinese enterprises in this regard is not good, or even simply ignored!
Thus, M is a complex process, and how to systematically do the layout and Good details, all-round preparation is essential. Chinese companies often have such features, in one respect they have strong skills and outstanding performance, but in the overall operation and system operators, often there are some flaws. Although the failure of any M & A is not caused by a single point, but should see the failure of any acquisition by a certain individual are often caused by negligence.
many companies will say in overseas mergers and acquisitions, we have a lot of thought and careful preparation, the acquisition process is also hard work to do in all aspects, why the end, into a passive? Of course, we recognize the pre-merger will be to consider each firm to Planning the fact, but the actual implementation process, there is not considered clear? planning is really in place? method is appropriate? it is every business need to seriously reflect on the issue. notes, very often, the angels in the imagination, but the devil is in those you do not see the details in mind.
we may as far as the two cases.
10 months. This almost total defeat of foreign M & A as an ironic grimace, profound and sad to be printed on the history of Chinese overseas acquisitions.
peace: sad the robbery
< p>
Ping, they are sure to go out.
The Star Insurance Company, has a lot too awkward to .20 years, China has accumulated more than 300 million Ping-old policy, the average interest rate for up to 7%, which requires a higher return peace to find matching; the same time, the entire insurance market matured, the premium arising from slower growth in cash flow slowed, leading to more stable peace must be sought, more long-term investment.
peace is strong. up to 1.9 trillion U.S. dollars in China's foreign exchange reserves in the context of much-needed flood, July 2007, Ping An to obtain 5% of the total assets of foreign investment in the floating amount, equivalent to more than 300 million - can be said to have sufficient ammo.
Netherlands - Belgium, Fortis will enter a safe line of sight. Fortis Group is a business covered by insurance, banking and asset management financial services companies, renowned in Europe.
Ping An of China will undoubtedly see a bright future. According to JP Morgan estimates, Fortis was established 17 years ago, the average dividend rate of more than 6.5%. If the results of the long-term maintenance continued, substantial investment in Fortis will undoubtedly return. Meanwhile, Ping An investment in Fortis, will also be covered by insurance, banking and asset management of the advanced experience of the three major financial areas, multinational financial giant to build the dream within reach.
< p> From the end of 2006, they came into contact with Fortis Ping An Group. up to 1 year of study, they concluded that: well, promising.
In fact, when the rich through the problem a lot. First, behind the high dividend rate, Fortis as a on October 9, Royal Bank of Scotland, Fortis Bank for the Spanish bank Santander, spend 71 billion euros acquisition of Dutch bank. this time for 6 months, the largest European banking takeover battle, the outlook is less clear, has not been inconclusive.
safe level their study, after proved to be one after another to buy Fortis stock, and added to 4.99%, to become the single largest shareholder of Fortis .2008 March, Fortis Ping An Group General Manager Louis to visit the board, the two sides began plotting: Ping to 2.15 billion euros to be invested on the price Fortis asset management company 50% stake.
the signing of a memorandum of understanding, the disclosure of the this information: Fortis asset management company, about 23 million euros of CDO and CLO exposure.
CDO, also known as collateralized debt obligations, CLO also known as mortgage bonds, is the U.S. subprime mortgage crisis contributed to the severity of the role of bonds hazards, until the roof fell, its 40 billion euros shortfall was made public.
so much of the / Unit dividends, safe total of 56 million euros in dividends six months - everything looked so good.
fact? To acquire the Dutch bank, Fortis need to come up with 24 billion euros, 6 times profit in financial year 2007, for which Fortis had to try to stock additional 13 billion euros to complete this to decline.
At this point, the financial crisis has intensified .2008 May, Fortis announced that its net income by the sub-prime mortgages, from 1.17 billion euros in 2007 fell to 808 million euros, down 31 %.
forced resignation, in June 2008, in order to ensure cash flow, Fortis announced additional EUR 8.3 billion for. This will undoubtedly deprive shareholders of dividends rights and undermine the peace stake. This When peace, in order to protect the status of major shareholders, again regardless of the risk actually spent 75 million euros to buy the additional shares of 5%.
- So far, 121 million Ping An shares held by Fortis, the total investment cost as much as 23.8 billion yuan.
all unhelpful .2008 September 16, the London inter-bank overnight dollar rate soared to a dismantling of 6.44%, out of concerns about financial position of Fortis, Fortis Bank will be shut out of all. after Fortis shares fell 5.2 euros in the week, the capital chain might break at any time.
However, China does not end the nightmare of peace, a series of political combat is roaring .2008 3 October, the Dutch government announced it would pay 16.8 billion euros acquisition of Fortis in the Netherlands, all banks, insurance, and be nationalized; October 5, Paris, banks of Belgium, Luxembourg, the two countries The Government agreed to acquire Fortis in Belgium and Luxembourg branch.
In order to smoothly promote the nationalization of the Government of Belgium and the Netherlands Government has not sought the views of the shareholders of Fortis, Fortis Board of Directors has not made duly authorized, have single-handedly, forcing the Fortis Board of Directors signed. and in the process, the safe level far away as China, the largest single shareholder is the sad ending is only waiting.
to October 2008 29, closed at Fortis in Amsterdam on the market price is only € 0.83. 23.8 billion investment in Ping An has lost more 95%.
summary Fortis Ping An investment in failure, the following points:
First, asymmetric information, the entire investment in a Third, in the background of the subprime crisis, there is no harm arising from the crisis to make adequate preparation; Fourth, the lack of local political risk assessment, incident response and lack of adequate ability to control.
profound lesson enough, but the de facto loss, but never found again.
mutation of this mixed market, labor disputes, multinational cultural conflict, battle of the big technology mergers and acquisitions, in the struggle started, but also the end of the fight.
SAIC: total defeat dragons
far, South Korea, Ssangyong Motor's fifth-largest car company headquarters in Seoul, but also suspension Hu Maoyuan, under the title 48.92% equity holdings and then to 51.3%.
SAIC and Ssangyong's acquisition of the road at the outset waves have arisen. contract five days before the Ssangyong union held a strike. unions aggressive, requiring signed a special agreement with SAIC, including participation in board decision-making process to allow trade unions to protect the employment and terms of transfer of equipment not to be.
Ssangyong union belongs to the As early as the end of 2003, intended to prevent a merger investigation into the plant side, even emboldened to organize , as one of the SAIC to do bigger and stronger, finally determined , invited global management consulting firm Hewitt Associates, for the key positions Ssangyong employees do pay attractive design.
with the ROK in order to narrow the distance between home and office staff whenever Korean wedding , funeral, from Zhang Haitao, deputy director of China's chief will try to attend. the staff before the family's mourning hall, all kneel down to worship in accordance with local customs and to spare gesture. and Shen Jianping, vice president flew to Seoul time, the total can not forget South Korea put the pieces of Chinese painting presented to colleagues.
However, SAIC's low profile does not appear to be South Korea's identity, despite the earlier Renault, M & A in South Korea when the U.S. General had the same experience of trade unions strong pressure, but this is the dilemma SAIC will still have to face quite different -
acquisition of Korea depot depots in Europe and America, business logic is to transfer some R & D capacity and even to this; the acquisition of South Korea and China depot depot , is the acquisition of its technology business logic, and its production capacity to China. For the Korean automobile industry workers and the management of local interests, the SAIC is a time for burning bridges outsiders, once its industrial upgrading will be completed Ssangyong abandoned.
soon, South Korea fell into the insecurity of real office.
2005 年 3 16, SAIC Ssangyong sent to five senior executives The next day, M & A project team immediately SAIC submitted a draft plan to the main Ssangyong MPV SUV cars and modified cars into China in the shape of the production, use SAIC brand.
undoubtedly ignite the ROK trade unions to resist emotions. year in May, Ssangyong union sent seven representatives flew to Shanghai, mainly for two reasons: Ssangyong may face the loss of core technologies and talent; local suppliers and local economic interests. In In this case, SAIC had to demonstrate a product transfer plan.
However, SAIC has opted to long-Su town of Guanxi gas cooperation, SAIC speculation action by the union of his tacit support.
2005 年 11 on 5, there are four months from the end of the term, the Soviet town of Guanxi be removed on the grounds that failure to complete the promised year profit target. personnel.
However, SAIC's attack did not immediate.
Guanxi is the town of words after the Soviet Union, namely the company obtain millions of dollars in pension and severance, was flatly rejected . Subsequently, SAIC disclosed a series of Soviet town after another Guanxi's misdeeds, including: the Soviet Union during the acquisition of gold per capita illegal recruitment charges, Ssangyong's a lot of maintenance and spare parts manufacturers point of interest relationship with the Soviet Union, the Soviet Union the major plant costs well over budget.
This will undoubtedly set off a thousand ripples. Su dismissed by the Board after the town of Guanxi, the first phone call is the union, so they organized a strike!
< p> South Korea has always been to have competitive with each other more than a dozen factions. In this structure, the stronger of the factions would not so tough out factions, and the remaining are the most hardcore.
the years that followed, the Soviet Union Town Guanxi used >
SAIC's no way to display their strategic planning. Throughout 2008, production capacity 220,000 Ssangyong only create 8.1 million cars In 2009, Ssangyong Group, filed for bankruptcy. If true, SAIC 4.1 billion investment will be in vain.
Ironically, in the factory workshop Ssangyong, still impressively printed with such a slogan: / p>
SAIC is that the failure of mergers and acquisitions, M & A strategy misconduct, too much faith in their ability to integrate possible scenarios of the business strategy for the lack of response, and when things happened, but also a lack of communication skills. fundamental The reason is that M & A environment in the immature, they adopted a mergers and acquisitions.
SAIC's experience from the peace and can see the demonstration and the pre-merger post-merger integration of two critical factor. For Chinese companies, in the case of transparency of information, decision-making process and not difficult. difficult is long and full of variables after the merger integration process.
from Zoomlion and North A successful M & A cases, we can find an answer.
Zoomlion: mergers and acquisitions across the threshold
Zoomlion, in the the industry is considered a Paul McNair 80% of the equity.
2007, Italy's CIFA Zoomlion company into the eyes. CIFA was founded in 1928, the top five in the world, the concrete industry. the financial crisis coming , suffered heavy losses of the parent company of Ma-genta CIFA had to sell assets to repay debt.
Why M & A? Zoomlion Chan, chairman of the new pure reason is that acquisition is Zoomlion a participation in the international market important tool, and CIFA, fine texture, and has maintained profitable, but also has a number of core patents, which in the past the Overseas Chinese are usually more cumbersome business losses or very different.
decision M & A front, in the heavy division has made in all the details carefully research, down to the detailed study of CIFA's staff found that most employees live in the 15 km radius around the plant area. In their view, which determines the staff of the enterprise The weakness '(cooperation) the word. We know that every time the mood CIFA staff will be very complex, very fragile mental. the second or third, but only ranked fifth in the joint, if the two companies can work together, will bring great synergy. CIFA has won the trust of the board.
signed agreement is only a start, the greater the problem often also from the post-merger integration. One day after the signing of the acquisition agreement, Zhan received the new CIFA to the current CEO Farah Lee's phone, the menacing Italian Zoomlion directly accuse the integrity of a problem. and with great effort, Jim discovered that the original acquisition agreement is the other side of the misunderstanding of certain terms that Zoomlion intends to lay off after the acquisition.
cuts in overseas M & A is undoubtedly one of the most sensitive topic, a more serious consequence is caused by the trade unions to protest once the work carried out will be more difficult. Chan Ming really tell each other : A Chinese managers are not accredited, fully retained CIFA's management team. Jim also told us: >
Zoomlion this set up a docking. from the exhibition which models the two sides should send participants to how to integrate the existing distributors, as well as the positioning of both brands such as the future, are discussed in detail.
lay-cost and high , how do? Zoomlion this cleverly designed and reflect a workshop, even with the way the transport costs and some taxes and other expenses, the price is cheaper than the whole production is much in Italy.
after the biggest obstacle is the acquisition of cultural exchange. To this end, the new requirements Zhan employees must take the initiative to stand in each other's position on the issue. Once, in the Milan office, saw a Chinese staff member speak loudly into the phone, he immediately walked over to his side and softly cautioned: listen carefully to what you're talking on it, taking into account also the work of other colleagues. with a knowing smile. He was invited to appear on Italian colleagues, to his surprise, the meal my colleagues have been able to house the children are proficient at using chopsticks.
how to CIFA acquisition in the future Under the new organizational structure to better play to its advantages, definitely need some time to think and to create a new management style.
one day after the merger, the Ferrari suddenly told him, CIFA had a layoff , reduced the original 1,100-strong team of 700 people. Zhan new very surprised because when he promised not in the acquisition of CIFA any layoffs. But Ferrari said to him: not the main reason for layoffs because of mergers and acquisitions, but financial crisis was too serious. Zoomlion not even come, CIFA also use this approach to deal with the environment of the Depression.
a truth, so that they self-management, the effect is much better than the Chinese personnel management. retrenchment such a thing, especially if the Chinese officials to announce that nothing short of an earthquake. self-management approach was later used for a number of personnel changes. Whenever there are major personnel appointments, Zhan usually not eager to announce the new, but the first with Ferrari, I do a full exchange, then the other Ferrari out for the team members to convey the message.
together, this one than I do the work better. : Integration of the Road
how fruitful enterprise to be integrated to find the North a doubt a key to open the door to mergers and acquisitions.
Beijing First Machine Tool Plant (referred to as: the North a) the acquisition of Coburg, Germany company, is an economist Fan Gang is praised as is 10 times the time of acquisition, the profit is the sum of 5 times prior to the acquisition, Coburg increase of 200 employees.
.2005 acquisition did not go well at first, the message had just one release, the German media can not accept this cruel reality. North of a well-known in China only, Coburg companies has a century of history, in the milling machine market share has been highest in the world. a hostile local media reports and the very call to action rendering, the acquisition of the purpose of spreading the Chinese people is to get equipment, technology and brand, and then to China. German local governments have also some doubts, they worry that a White Coburg North, the large area of the layoffs will occur, can not ensure adequate employment.
unfavorable public opinion environment, a rapid development of the North a Fort large company to do the adjustment. In order to convey this view to go out, director of digital media business immediately flew to Coburg, Coburg, and the company to meet the staff up and down, one by one child conversation. ask this question is very simple: you on the new What shareholders expect? What are you most worried about? If we entered the northern one, what would you think?
candor in return was a real voice. a director of the North to resolve concerns that Geesung Choi , stop the negative rumors, must also be on site for everyone to form a state.
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