Balancing integration and autonomy in the post-acquisition phase : A study of German firms acquired by Chinese firms

Abstract: Acquisitions as a commonly adopted tool enable Chinese firms to gain quicker and deeper access to certain resources and capabilities from developed countries. The integration process after acquisition plays a key role in creating the expected value for acquirers. In recent years, Chinese acquirers have shifted their integration strategy from heavy involvement to high autonomy. By examining six acquisitions done by Chinese firms in Germany, this study was carried out in order to answer the question how integration and autonomy can be balanced in the post-acquisition phase. Specifically, five key success factors were examined: culture distance, communication, integration speed, leadership & top management team turnover and resources complementarity. The results demonstrated that both high integration and high autonomy could be simultaneously achieved in one acquisition case. Despite the fact, that in general speed of integration was slow, all examined acquisition examples achieved a high integration level after a certain period of time. The results also showed that the Chinese side rather considered large cultural distance between the two countries a complementary factor as they benefited from learning the German way of conducting business. The German side also tended to learn from its Chinese acquirers, which stabilized top management teams during this “co-learning process”.