Shanghai Automotive and Ssangyong Motor-A Tale of Two Dragons (C)
Code
CC-309-003
Date
2010
Industry
Automobiles & Automotives
Length
23P
Author(s)
Xu Leiping; Steven White
Language
English
Company
Shanghai Automotive and Ssangyong Motor
Source
CEIBS
Discipline
Strategy & General Management
Key Words
M&A; Globalization; Strategic Exit; Divest.
Description
This final case of the 3-case series describes the grim situation facing SAIC in late 2008, pummeled by the financial crisis after seemingly overcome some of the major challenges of the first two years as controlling shareholder of Ssangyong. The Ssangyong union was again resisting proposed changes that SAIC saw as inevitable to ensure Ssangyong’s continued solvency. SAIC was now faced with the decision to push through the necessary changes in spite of union response, give up control to a court receiver, or divest its share of Ssangyong. The case serves as a basis for discussing the decision of whether and when to divest and, particularly relevant for high-profile acquisitions by Chinese firms, the economic, strategic, political and reputational risks of a “failure” abroad.
Case Sample
