China's construction machinery companies overseas mergers and acquisitions become butterflies

Recently, China's top engineering machinery manufacturers are accelerating the pace of going out and overseas acquisitions continue to write a new chapter. Sany, Liugong, Xugong, and Yamagata... A series of overseas mergers and acquisitions have come one after another and people have been dazzled. In fact, overseas mergers and acquisitions have a long history. We are no strangers to this. We have only regressed for two decades. Chinese companies often play a role in mergers and acquisitions in cross-border M&A cases. Today, Chinese companies have become active parties. Experts said that the wave of cross-border mergers and acquisitions led by China's construction machinery manufacturers is a sign of the gradual maturity of China's construction machinery enterprises and an inevitable choice for the development of enterprises under China's economic globalization.

Through the "going out" to achieve growth in recent years, the United States economic weakness and the continued spread of the European debt crisis, for the preparation of Chinese construction machinery companies overseas mergers and acquisitions provided a good opportunity. Some enterprises have seized this opportunity to lay a solid foundation for the transformation of Chinese construction machinery from "manufacturing" to "intellectualism" in the tide of development of construction machinery.

According to a report released by PricewaterhouseCoopers in Beijing, the number and amount of overseas M&A transactions by Chinese companies reached a record in 2011, with 207 transactions, amounting to USD 42.9 billion. In 2012, Chinese companies’ mergers and acquisitions became even more fierce. Many of the acquisitions were world-class companies.

It has been reported that the overseas acquisition of Chinese construction machinery giants is not merely the dismantling of the production line to return to China. What they are seeking is brand recognition and the establishment of distribution networks, and the realization that China will push China into the throne of the world’s largest exporter of construction machinery within three years. aims.

At present, the global construction machinery market has reached 150 billion U.S. dollars, and Chinese companies can flex their muscles, go out and gain more shares. In 2010, among the world's 50 largest construction machinery manufacturers, Chinese manufacturers accounted for 15% of revenue, compared with 1.6% in 2003.

It is reported that XCMG made two acquisitions in Europe in 2011 and is seeking greater overseas assets in order to achieve its target of RMB 300 billion in revenue in 2015 and take a position in the “investigating flowers” ​​position in the global industry. Chinese companies have also changed their strategies after the completion of the acquisition. For example, when Zoomlion acquired Italian concrete machinery manufacturer CIFA in 2008, it retained the original management and production team and became the first large-scale Chinese construction machinery manufacturer to do so. Sany Heavy Industry acquired German concrete pump manufacturer Putzmeister and will establish a new headquarters for the overseas concrete machinery business in Germany. With the deepening of the economic uncertainty in the euro area, the jobs of the acquired companies have been retained and welcomed by everyone. In the future, the pace of overseas expansion of Chinese construction machinery companies will continue to accelerate.

The importance of overseas business is increasingly highlighted in accordance with the "Twelfth Five-Year Plan", and by 2015 China's construction machinery industry will reach 900 billion yuan in sales. To achieve this rapid growth, overseas mergers and acquisitions will undoubtedly be one of the shortest ways for the Chinese construction machinery industry to become bigger and stronger.

Not long ago, Minister of Commerce Chen Deming said at the National Conference on Business Work that he would “encourage powerful companies to invest in mergers and acquisitions globally, integrate resources, nurture famous international brands, and increase support for private companies going global”.

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, strengthen the protection of investment rights, strengthen risk warnings for enterprises, and improve overseas operations. Emergency response mechanism; directing companies to respond to overseas anti-monopoly reviews and lawsuits.

In the opinion of the vast majority of analysts, encouraging powerful companies to invest in mergers and acquisitions globally, integrate resources, and nurture internationally-renowned brands is imperative for China, which is undergoing a transformational stage of development, 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.

Zhan Chunxin, chairman of Zoomlion, pointed out that in 2012, Zoomlion's two major themes were transformation and internationalization. Zoomlion’s overseas company is at the forefront of internationalization, and it is the antenna of the company's global business. It is also a meeting point for corporate transformation and internationalization. It can best reflect the management level and internationalization level of a company. Therefore, it should become the vanguard of corporate management reform and internationalization. Overseas business is one of the two major growth poles for the company's continuous development. This position has not changed and will not change. The important position of overseas business in the future will only become more prominent.