China's Construction Machinery Enterprises From Cross-border Mergers And Acquisitions To Set Up

August 1, 2008, China's "anti-monopoly law" is about to take effect

. law provides that: "foreign acquisition of domestic enterprises, or otherwise participate in the operators, involving national security, in accordance with relevant state regulations to review." This provision is hidden behind too much content. Which can not be overlooked, which is facing the China Engineering Machinery cross-border mergers and acquisitions.

According to M & A has been annexed to the main points, present, China's construction machinery are mainly two kinds of cross-border mergers and acquisitions. First, foreign mergers and acquisitions of Chinese enterprises; First, China's business-to-foreign mergers and acquisitions. Two kinds of acquisition-related interests of all parties is different from the purpose and consequences are also varied.

In the first M & A have been mergers and acquisitions of domestic enterprises, which want to be the reasons for mergers and acquisitions, simply a few. First, lack of funds, hoping the introduction of foreign capital; the second is that access to foreign technology; 3 is to obtain foreign management experience; 4 is hoping to draw foreign brand to expand its market share. Quite often the reason for the parties to the local government is also actively promote such acquisitions. Therefore, some domestic enterprises, even at the cost from the lower social status, low-cost selling and foreign investment. This is in fact a manifestation of the lack of global awareness.

From an engineering perspective mechanical characteristics of its technical secrets with the general simple production completely separated. For example, use of materials, mechanical components and systems design, information systems portfolio, can be completed in the foreign headquarters, leaving the Chinese employees, often Zhaomaohuahu type of production and assembly work. In this sense, it is necessary to conduct a survey in China's construction machinery industry mergers in the process of Chinese employees the number of newly acquired technologies. It is a measure of foreign investment should also be an important indicator of the outcome of the merger. Therefore, you really want to force open to foreign investment techniques, the best is to allow foreign investment in new plants, and in the competition between Chinese companies, rather than allow foreign mergers of Chinese enterprises.

From the financial point of view, perhaps some Chinese enterprises are certain difficulties, but on the whole macro-environment, China is not lack of funds. Therefore, should not simply rely on foreign capital. From the management, sales and marketing point of view, many domestic enterprises do not realize that these areas is her own strengths, not their own shortcomings. Some domestic enterprises, although not difficult to achieve a high standard of management, but the channel relationship is solid, and its market is also the result of decades of working hard. This is precisely the lack of foreign investment. The reason why foreign investors are willing to mergers and acquisitions of domestic enterprises, that is, decades of domestic enterprises want to build the sales channels, markets and basic equipment, plant.

Merger with foreign counterparts Chinese engineering machinery enterprises is that the Chinese construction machinery to overseas expansion. For example, Zoomlion merger British "Paul Lu Jie", long re-acquisition of German machines, "KOCH" and so on. The "Paul Czech Republic" R & D of non-excavation equipment, excavation in the world the leading edge in the field of construction machinery; Germany "Koch" for bulk material handling equipment industry, the world's leading enterprises, its tubular belt machine market share in the world ranked 1. It is precisely through mergers others, rather than being another way of merger, Chinese companies may have only a group of internationally renowned brands and patents to improve the level of technology research and development of our enterprises.

However, the blind pursuit of cross-border mergers and acquisitions are also not desirable. First of all, the situation of foreign companies, due to incomplete information, there is often relatively large risk. Secondly, the integration of multinational corporations more difficult, much higher than the integration of domestic enterprises, language and cultural differences than the larger. More importantly, is now a national trade protection awareness has started to wake. China, the United States, Japan and Europe have started to adopt strict review of cross-border mergers. Such as the German law clearly forbids the leading acquirer create or strengthen market dominance of the M & A behavior; Canadian law provides that more than 200 million U.S. dollars of the merger agreement must be approved by the Government after the entry into force; while the U.S. Congress and the Administration on foreign mergers and acquisitions not to mention hostility, the acquisition of Chinese enterprises in the United States invariably encounter great resistance. Therefore, while continuing to seek cross-border mergers and acquisitions at the same time, to speed up plant in the target country may well be a reliable way. For example, at Caterpillar Suzhou, Wuxi, Tianjin, Nanjing and the establishment of new plants, Sany Heavy Industry in the U.S., India to build factories in this way can effectively break market barriers.

Cross-border plant, from the face of it, if do not have the advantages of cross-border mergers and acquisitions. For example, direct access to the target country can not be the appropriate technology, the target country and market channels are not familiar with. However, these will be offset by the flow of talent. Domestic enterprises in overseas start-up of new companies can also be through the recruitment of local technical and sales personnel, to promote the technological progress of China's construction machinery and overseas market expansion. In short, from the cross-border mergers and acquisitions to set up factories abroad, and implement talent acquisition strategy, or will be China's construction machinery to the world of the inevitable choice.

by: gaga

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