Shanghai Automotive and Ssangyong Motor – A Tale of Two Dragons (B)

The case was developed by Research Fellow Xu Leiping of the China Europe International Business School, and Professor Steven White of the School of Economics and Management, Tsinghua University. The case was prepared as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The first author was partly supported by NSFC project 71072059 and NSFC project 70901051. This second case of the 3-case series describes events from the time the deal was signed in October 2004 through October 2006. The new owners faced a range of major challenges to achieving the strategic objectives driving the acquisition. These included significant resistance and distrust from the Ssangyong union, local media, community and government, as well as the negative reaction to SAIC's responses to those challenges. The case serves as a basis for assessing integration management, as well as rich material for discussing stakeholder management in a cross-border acquisition. It also highlights the particular challenges facing a newly-internationalizing firm like SAIC which has no experience in managing such issues abroad.