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One Company’s Pain, Another Company’s Gain: Beijing No. 1’s Acquisition of Waldrich Coburg

Abstract

China’s extraordinary economic growth over the past two decades has made the country into a world power, allowing it to accumulate nearly $2 trillion in foreign exchange reserves and to elevate hundreds of millions of its citizens into the middle class. This prosperity has also enabled Chinese businesses to invest in companies overseas (China Daily 07/06/09). However, initial attempts by Chinese industrialists to invest abroad have met with mixed success. Beijing Number 1 Machine Tool Plant successfully acquired Waldrich Coburg in October 2005. Three years after the transaction, the acquisition has proven to be a financial and strategic success. Beijing No. 1 stands as an example for other Chinese companies that wish to expand their businesses into the global market and to effectively manage foreign subsidiaries. In this case, therefore, we explore what worked for Beijing No. 1 in the hope that this will provide useful insights into how other Chinese multinational corporations may replicate Beijing No. 1’s success.

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Published by:China Europe International Business School

Publish Date:2010-01-01

Language:English

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