China’s construction machinery army’s attack on overseas coincides with favorable conditions

At the beginning of the Year of the Dragon, Liu Gong and Sany pushed the overseas acquisitions of the Chinese Construction Machinery Corps to the highest level in history. Once upon a time, the industry leaders who have allowed Chinese companies to stand tall have become the partners that have fought side by side with us today.

The timing of overseas mergers and acquisitions “There is no doubt that the collective attack of the Chinese Construction Machinery Corps was accidental and not accidental. They received the encouragement and support of the management, and also shouldered the historic mission of revitalizing our industry.” An unwillingness to name Analysts told reporters.

Not long ago, Minister of Commerce Chen Deming said at the National Conference on Business Work that he will “encourage powerful companies to invest in mergers and acquisitions globally, integrate resources, conduct research and development, production and marketing activities, and nurture famous international brands. "Going out" support."

To ensure that this strategy can be implemented actively and steadily, Chen Deming also pointed out that in the future China will “accelerate negotiations on investment protection agreements with major economic and trade partners, eliminate barriers to market access, and strengthen protection of investment rights. Strengthen risk warnings for enterprises and improve Emergency response mechanism for overseas emergencies. Guide enterprises to respond to overseas anti-monopoly review and litigation."

In the opinion of the vast majority of analysts, “encouraging powerful companies to invest in mergers and acquisitions, integrate resources, conduct research and development, production and marketing activities, and nurture internationally-renowned brands worldwide” is for China, which is in the transition stage of development. It is imperative and it is imperative.

Now that the financial crisis and the debt crisis in Europe have not been resolved, a large number of European companies are faced with a decline in product sales, arrears of suppliers’ payments and employee salaries, and even on the verge of bankruptcy. This not only mobilizes the enthusiasm of Chinese companies to “buy the bottom” overseas, but also makes Chinese companies quicker. The promotion of comprehensive strength and integration into the international market has provided a rare opportunity.

"In fact, since the 1990s, overseas mergers and acquisitions have gradually become an important way for Chinese companies to invest overseas. Although there are no shortages of successful cases, they are also more successful and less successful." Analysts said.

For example, as early as October 2004, SAIC acquired a 48.92% stake in South Korea's Ssangyong at a high price of US$500 million. However, this acquisition caused a sudden wave of strikes by Ssangyong employees.

Almost exactly the same as the “predecessors”, before this time Liugong completed the acquisition of the Polish HSW engineering machinery business unit, in June 2011, influenced by the local negative reports, the HSW enterprise unions doubted the credibility of Chinese companies and demanded that Guangxi Liugong guarantees employees' work contracts for the next five years and gives all employees of HSW a 5% salary increase. However, Guangxi Liugong only agreed to guarantee the three-year work contract for HSW employees and increase the salary by 3%. Once the two sides stagnated on this issue, the acquisition was forced to suspend.

Afterwards, in December 2011, Liugong finally reached a consensus with the Polish HSW Union on social security issues. Liugong will guarantee the HSW staff's work contract for the next four and a half years and raise the salary of HSW employees by 3%. Both parties held a signing ceremony for the social security agreement in Poland on December 7. This led to the final success of Liugong’s acquisition of the construction machinery business unit of Polish HSW.

“This shows that Chinese companies’ experience in overseas M&As is getting richer and richer. The reason for these failed cases is that management has proposed to “accelerate the negotiation of investment protection agreements with important economic and trade partners, eliminate barriers to market access, and strengthen investment interests. protection. Strengthen risk warnings to enterprises and improve emergency response mechanisms for overseas emergencies. The importance of guiding companies to respond to overseas anti-monopoly review and litigation. Based on this, we should allow some failures to exist." Analyst Xia Qingwen said.