Sanitary acquisition of surging resources integration still need to be cautious

In recent years, the bathroom industry acquisition frequently. In 2013, Lixil acquired Grohe, and Lesso acquired Yigao, which became a hot spot in the industry. On the one hand, enterprise acquisition is resource integration, on the other hand, it can also improve production technology through joint, and then enhance the competitiveness of enterprises. But in fact, whether it is the strong or the strong to buy the weak, during the hidden dangers of enterprises can not be underestimated, after all, after the integration of business model is also a big problem.

Industry acquisitions are frequent

In 2009, Zhuhai Boao Sanitary Ware under Seagull has officially taken over Sanying Sanitary Ware on November 1st. Foshan Sanying Sanitary Ware will be operated as an independent division of Seagull Sanitary Ware.

In September 2013, Lixil acquired an 87.5% stake in Grohe, a German manufacturer of bathroom products, for 400 billion yen. Lixil is regarded as an important symbol to open up the European sanitary ware market and expand its global market share.

In November 2013, Lesso Group announced the wholly-owned acquisition of Yigao Sanitary Ware. The two parties will share resources and information in internal management and external market.

Why risk a takeover?

In fact, every company knows the risks of acquisition, but why are any companies willing to take the risk? In fact, on the one hand, enterprise acquisition is to integrate and utilize sanitary resources under the severe situation of sanitary ware market. On the other hand, it is also through the continuous downturn in the sanitary market to seize people, store favorable resources.

It is reported that Lixil has retained the original team after the acquisition of American Standard and Grohe, and American Standard's production in America still uses American Standard's product name and trademark. The same is true of Grohe, which was acquired with Lixil signing a new five-year contract with Grohe executive David J. Haynes, while Grohe's China-based partner Zhongyu Sanitary was not affected by the acquisition. Through resource integration, enterprises develop their strengths and circumvent their weaknesses. Undoubtedly, they have won more favorable conditions for competition.

The fortunes of the acquired companies vary

After the acquisition of an enterprise, it may gain wings at the beginning, but in the process of mutual integration, the two enterprises are also likely to have conflicts in the business model, management system and other aspects, and these incongruous factors will play a non-negligible hindrance to the development of the enterprise in a short time. As a result, the fate of the acquired companies varies among the many takeovers.

It is reported that after Sanying was acquired by Seagull, the buyer did not make too much investment in Sanying, which made Sanying's brand promotion and marketing weak. With the relocation of marketing headquarters, Sanying's brand publicity and product marketing were greatly hindered, and brand investment was Mired in the quagmires.

American Standard, by contrast, was much luckier after the takeover. Lixil made a large area of rectification in the American market after the acquisition of American Standard, while after the acquisition of Grohe, on the basis of retaining the original mechanism and development, it strengthened the cooperation with the Asia-Pacific region, making the development of Grohe into a virtuous cycle.

Conclusion: The fate of Sanying has exposed some disadvantages of acquisition, while Lixil's acquisition of American Standard gives hope to the industry. "Acquisition" from the general point of view is mostly the acquisition of the weak by the strong, but there is no lack of strong and strong joint phenomenon. Whether in the industry acquisition or cross-bank acquisition, under the goal of integrating resources, there is a trend to expand the development of sales. However, there is no denying that the differences between the acquisition and the acquired enterprises in business model and other aspects are bound to affect the integration of each other. If handled well, of course, it is like adding wings to the tiger. If not handled well, it may fall into the development bottleneck and even end in failure. Therefore, it is difficult to generalize the advantages and disadvantages of the acquisition, is the enterprise to take this leap to the sky, or the stubborn, the end or have to rely on the enterprise itself. Buy and be bought with caution. We should not only choose the enterprise suitable for our own development, but also have the potential to help development. Only when the two reach the priority of integration, can we really achieve the purpose of integration.

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Beilin Sanitary Co. Ltd. (PSFK Group)
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