China’s Joyson Group: A Unique Approach To M&A Integration

In January 2011, China-based Joyson Automotive Group (Joyson) acquired Preh GmbH (Preh), a German manufacturer of high-end automotive components. While Joyson had lower capabilities in areas such as management and engineering, it was able to ensure a successful acquisition of the more competent firm Preh after years of careful planning and relationship building. Joyson had grown over 14 years to become a US$10 billion manufacturing company by continuously acquiring more capable firms. The acquisition of Preh would make the two companies powerful players in the global automotive parts supply market and promised to provide Preh with financial resources and access to the lucrative Chinese automotive market, but only if the Chinese and German companies could be integrated successfully. How could Joyson’s management team ensure a successful integration of a firm with superior management, soft skills, and technical capabilities?

This case is appropriate for business management and international business students at the senior undergraduate, masters, and executive levels in courses dealing with cross-border M&A transactions, internationalization of emerging markets, and leadership styles.<br><br/>This case focuses on issues related to cross-border acquisition and integration, foreign investment, and emerging-markets internationalization and provides insight into the development and implementation of international business strategy through a cross-border acquisition from an emerging market firm. Students are asked to reflect on international business strategy—including modes of entry and internationalization processes—and to think of ways acquiring firms can manage post-acquisition processes that are different from those approaches discussed in the mainstream literature on leadership styles in emerging markets. The main objective is to provide insights into how a company based in an emerging market can successfully acquire and manage a company in a developed market. The case illustrates a novel approach to post-acquisition integration that helped to realize synergies regarding innovation, brand influence, and internationalization. After working through the case and assignment questions, students will be able to:<br><br/><ul><li>Describe company motivation to undertake a cross-border acquisition as part of a growth strategy.</li><li>Identify competitive strategies of emerging-market multinational enterprises.</li><li>Explain the competitive advantages of emerging-market firms when managing developed-market firms.</li><li>Explain the rationale behind a two-step entry mode (i.e., a joint venture followed by an acquisition).</li><li>List the benefits and risks of adopting a novel approach to post-acquisition integration.</li><li>Identify the problems of sustainability with a “supporting partnership” strategy.</li><li>Describe the role of leadership style in merger and acquisition (M&A) deals.</li></ul>

• M&A
• Internationalization
• China
• Integration
• Strategy
• Joyson
• Automotive
• Emerging Market