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mentioned study of HCs, to their high product
quality, technical know-how, excellent custo-
mer service (oftentimes at the customers’ pre-
mises) and overall reliability. German enginee-
ring and craftsmanship enjoys an excellent re-
putation worldwide, making customers willing
to pay a price premium for high standards.
Oftentimes the service offerings of HCs include
individual solutions, services and personal cus-
tomer contacts, all presented in a manner con-
current to the attributes considered “classic
German virtues”
49
.
The companies consider their excellent image,
the resistance of the core business to crises
through geographic differentiation, the global
proximity to customers, the international pre-
sence with local production plants, logistics
centers, branches and sales offices, as well as
the quality of downstream services are seen as
the critical success factors. The companies
however agreed that the constant, aggressive
pricing and innovation-driven competition bur-
dens the margins of companies, forcing them to
seek new ways to grow
50
.
Internationalization attempts are not driven by
the need to grow and reinvent themselves
Investments in German Hidden Champions
Hidden Champions like the Coburg companies
attribute their success, according to the afore-
In both cases, critical factors in determining the
success of a M&A deal would be: a clearly de-
fined strategic goal and agreed upon at every
level and a clear vision on how to close strate-
gic competence gaps through the acquisition
deal, sincere and direct communication in order
to build the mutual trust, as well as assistance
from professional M&A teams and professional
M&A equity funds in order to solve some of the
potential risks. A strong and solid financial ba-
lance sheet of the acquiring company would
minimize the financial risks to a great extent
and generate additional time for the whole
post-acquisition and integration process. To re-
spect and understand the culture difference, a
light touch on the current acquired company’s
management and a proper interest’s alignment
structure could help to ensure the trust and
common goal between the acquirer and acqui-
red companies in the long run. Especially de-
monstrated in the M&A deal between Sany and
Putzmeister, the new entrepreneurs and private
owned companies from China are adopting a
more universal business standard and there
could be a good reconciliation between the two
different cultures based on the commercial
compatibility and the trust through sincere
communications.
Table 2: Summary of the critial success factor analysis based on two Chinese M&A in Germany
48
Figure 7: Main Reasons for the Internationalization of German Hidden Champions (Coburg companies)
Hidden Champions
