After the failure to acquire Saab

Core tips:

Is it a farce for young cars and huge groups to acquire Saab? What lessons does it bring us? In the future, where are you still eager to acquire fast-growing Chinese auto companies through overseas acquisitions?

Although BAIC and Volvo, as well as young cars that have been actively fighting for it, began to compete for Saab assets declared bankruptcy, the failure of Chinese companies to acquire Saab in 2011 has left the minds of people who have used the successes in the past few years. Disappointed and confused.

Looking back now, is it not a slap for Huatai Motors to withdraw from its midst, a youth car and a huge group collecting Saab? What lessons does it bring us? In the future, what will Chinese auto companies still desire to grow through internationalization?

"Automotive Business Review" believes that although the two Pang Saibo ended in failure, it is, after all, another attempt at the internationalization of Chinese auto companies. The courage and courage of Chinese private entrepreneurs are awesome enough.

The internationalization of a series of overseas mergers and acquisitions triggered after the outbreak of the global financial crisis in 2008 will not stop.

The European debt crisis that began in 2011 indicates that the impact of the financial crisis on the global economy is still far away. It still gives Chinese entrepreneurs more opportunities.

But why did such a turbulent acquisition fail? Will it provide a valuable reference for Chinese auto companies to better internationalize in the future?

Dr. Xie Zuyi, president of Bosch Consulting Greater China, believes that the acquisition of Saab by the two companies is a special case in the international acquisition, and its complexity is much higher than that of the general acquisition case.

In the general case, the bidding companies are mainly one company or one interest group as the main body, and there is one main negotiation object that is fully responsible for the acquisition.

In the process of the acquisition of Saab by the two companies, it should be a large group as the main investor to negotiate with Saab. The youth car is actually responsible for Saab's local production in China after the acquisition.

However, due to the fact that young cars also paid a lot of financial resources to participate in acquisitions, the main body of the acquisition changed from one company to two companies, and the starting point of the two companies involved in the acquisition was different, which also led to the two companies in the acquisition process There are differences in goals and there is a lack of corresponding communication, which ultimately leads to the failure of the acquisition.

Xie's comment on the “Automotive Business Review” stated that there were actually significant acquisition procedures in the acquisition of Saab by both companies. According to the general acquisition, when the company conducts due diligence on the acquisition target, it should find that Saab's technology involves GM’s intellectual property rights and actual control rights, and it should negotiate with General Motors in the initial stage of the acquisition to eliminate this acquisition. The unfavorable factors. In the end, the acquisition of Saab by both companies was ultimately a failure of General Motors.

There is another reason why you can't be overlooked. The general large-scale acquisition projects often avoid premature media exposure and win more initiative and negotiation time for the acquirer. The two Pang acquisition of Saab, high-profile publicity from the outset, and even in the later period, Saab repeatedly used overseas reports to pressure China's two acquisition companies, making the two Pang in the negotiations in a passive situation.

Since the reform and opening up in 1978, Chinese companies began shouting out and taking internationalization steps. It should be said that China's enterprises are very young, and they also have the problem of inadequate management capabilities and a shallow international perspective. This has been more prominent in Chinese auto companies that flourished in the last decade.

“Especially, we have very different cultures and values ​​from those of European and American companies. Chinese auto companies must understand the foreign market environment, learn how to effectively manage the company’s management methods, and be familiar with the local market’s business principles, relevant laws, and the power of labor unions. "Xie Zuyi said.

For China's auto companies, the success of the acquisition does not mean that the end, follow-up to how to do a good job of international operations is the real test. For example, after SAIC acquired Ssangyong in 2005, it failed to operate.

"Automotive Business Review" learned that SAIC Chairman Hu Maoyuan was guilty of the fact that the due diligence of the company's acquisition of Ssangyongqian Consulting Company did not inform them of the terrible nature of the Korean trade unions.

The internationalization of Chinese auto companies must understand their operating rules in depth, but the time they can learn is short-lived.

From a long-term perspective, the microeconomic laws are doomed to require companies to establish and maintain a certain scale in order to survive. Therefore, the number of auto companies that the global auto industry can accommodate is limited. Most of the space in the industry will be occupied by a number of powerful automotive companies. On the global stage, there is little open space available for Chinese auto companies to compete, and domestic competition is becoming increasingly fierce. Therefore, Chinese auto companies must constantly change and must move toward internationalization faster.

The "Automotive Business Review" believes that although the acquisition of Saab by the two companies ended in failure, if the acquisition of Saab's core technology began in 2009 to discuss the Saab acquisition, then there is no doubt that BAIC is a successful purchaser, and its mind is sober, now Seeking to buy another little bankrupt Saab's end production, it also shows its superior acquisition strategy.

In fact, BAIC's practice is a successful internationalization. Therefore, we do not need to be pessimistic about the internationalization of Chinese auto companies.

In addition to overseas mergers and acquisitions, the internationalization road includes setting up factories overseas; purchasing core or advanced technologies overseas; setting up R&D centers overseas to attract talents; outsourcing some of the R&D to overseas companies; and establishing cooperative relationships with international research institutions or famous universities.

Apart from the fact that the last method has not been widely used, Chinese auto companies are actively trying other internationalization methods. Such as Geely's acquisition of Volvo, Beijing Auto's purchase of Saab Technology, Changan Automobile and other R & D centers in Europe and the United States.

In contrast, although direct acquisitions may rapidly increase the competitiveness of Chinese companies, it is the hardest way for Chinese auto companies.

The most successful car acquisition today is Geely's successful acquisition of Volvo. However, due to the short time, people cannot judge its future.

In fact, Li Shufu has not participated in the operation of Volvo so far, still let Volvo's international team operate.

"This practice is more wise," said Xie. Although this can only be a transition, it cannot be the final form of internationalization of Chinese companies. He believes that Lenovo’s acquisition of IBM is a case worth learning for Chinese auto companies.

In the initial period of Lenovo’s acquisition of IBM, the market performance was not good, but Lenovo was good at learning. It quickly adjusted its board and management team internationally, not only to Chinese executives but also to more foreign teams.

From a Chinese company whose vision is only in the domestic market to becoming a multinational corporation with global management capabilities, the hardships, pains, learning and training are all necessary paths for Chinese companies.

But opportunities still lie ahead.

The erupting European debt crisis has once again opened the door to acquisitions for Chinese companies.

On January 29, 2012, Sany Heavy Industry, a giant from the southern city of Changsha in China, and China CITIC Industrial Investment Fund jointly invested 360 million euros to acquire one of the world’s most famous construction machinery manufacturers and the world’s largest concrete pump giant in Germany. Company.

Sany's best-selling product is a concrete pump—installed on a truck that can pump concrete up to 50 meters high. It sells nearly 5,000 concrete pumps each year, but it is almost entirely in China. Putzmeister is leading the rest of the world. The Chinese made a breakthrough by acquiring Putzmeister.

"CITIC Industrial Investment Fund as a private equity fund to participate in acquisitions can provide decision support for Sany Heavy Industry in the acquisition process and in future international operations. Chinese auto companies may also consider introducing private equity funds into the acquisition." Xie Zuyi on " Automotive Business Review said.