Chinese M&A in Europe: Emerging market multinational in the heavy construction industry

Purpose – This paper aims to examine the global competitiveness of an emerging market multinational (EMM) from China through the case of a major European acquisition, in Italy, in the heavy construction industry. Country- and firm-specific factors are considered. Horizontal integration in this oligopolistic industry changes the industry dynamics, with significant implications for its players. Design/methodology/approach – The paper follows case study methodology and triangulates data through a literature review, an examination of available company data and interviews of key personnel. Firm- and country-specific factors, both advantages and disadvantages, including the business environment in the construction industry, globally and regionally, are analyzed. Findings – The paper identifies several key success factors at the firm level, including the integration of research and development, marketing and sales; the development of extensive communication and trust among the managers of both companies; the exploitation of the Chinese market as a source of demand; and the shifting of selected production lines to the Chinese market. Research limitations/implications – The traditional models of country-specific advantages/ disadvantages and firm-specific advantages/disadvantages are augmented by examining the host market and industry task environments. Host country-specific factors for successful integration include favorable local conditions, both in terms of endowments and institutions, and an industrial cluster with supporting firms and services. Practical implications – Following the case study, managers can refer to the key success factors to emulate “best practices”. The paper concludes with a heuristic developed by the Chairman of Zoomlinon, Chunxin Zhan, underlining five principles for a successfulEEMacquisition: understanding, sharing, responsibility, compliance and coordination. Originality/value – This paper develops a deep case study analysis and provides useful theoretical and practical implications with reference to Chinese acquisition in the Western markets.