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The article examines the reasons and chances/
risks of Chineses Mergers & Acquisitions in Eu-
rope and mainly in Germany. It includes a study
that examines the development of Chinese for-
eign direct investment in Europe, with the scope
of identifying which factors contribute to the in-
creasing numbers of Mergers & Acquisitions
between Chinese and European firms. Using
data from a survey of 32 interviews with senior
Chinese businessmen in Europe and in China
which were executed between end 2015 and
beginning 2017. Beside the survey, the analysis
uses data of case study of three Hidden Cham-
pions (with companies: Waldrich, Kaeser and
Lasco) all located in the 50.00 inhabitant city of
Coburg, Bavaria, Germany. This paper seeks to
provide an overview of the elements that moti-
vate both acquirer and acquirer to engage in
these types of arrangements. The findings re-
veal that Mergers & Acquisitions between Chi-
nese and German firms, particularly between
Chinese investors and German Hidden Champi-
ons, tend to be mutually beneficial, indicating
that such partnerships will continue to grow in
volume and impact in the future. Another out-
come of the survey is, that the majority of Chi-
nese investment decisions are influenced by
many non financial indicators i.e. trust, reliabili-
ty, image, innovation, technology orientation
etc. and put Germany in favor vs. UK, Nether-
lands and France.
Introduction
In an increasingly globalised world, internatio-
nal business co-operations with strategic in-
vestments, such as joint ventures, strategic al-
liances, foreign subsidiaries as well as Mergers
& Acquisitions (M&A), become more and more
frequent
1
. Such collaborations exhibit several
challenges. Most notably, Mergers & Acquisi-
tions involve major adaptations from one or
both of the organisations, in particular in terms
of strategy, business processes, communica-
tion and corporate culture.
2
In addition, mana-
gers tend to analyse internal organisational
structures and environmental forces, but often-
times neglect socio-cultural and non directly fi-
nancial processes which also strongly influence
decisions at all operational levels.
3
Bradt
4
even argues that every other factor of
consolidation is merely a derivative of the cultu-
ral, relying to a large extent on the attitudes of
doing business and a successful cultural integ-
ration. According to an Aon Hewitt study
5
, M&A
fail to create value for the merging companies
in 60-70% of cases ,
6
with 33% of managers
blaming the differences in the way of doing
business for this failure and 50% even arguing
that these differences tend to become the main
post-deal challenge.
7
Hidden Champions
A Research for Reasons of International Business Strategy
for Chinese Mergers & Acquisitions in Europe and Germany
von Kai-Uwe Wellner
CM September / Oktober 2018
