Case Name :      China Kelon Group (B): Integration After Merger

Authors :           Justin Tan, Paul W. Beamish

Source :             Ivey Publishing

Case ID :            903M05

Discipline :        General Management

Case Length :    16 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Deals with the issue of integrating two large business groups after the No. 6 air conditioner manufacturer, Kelon Group, acquired the No. 5 air conditioner producer, Huabao. Whereas Kelon Group is a nonstate-owned company, Huabao was spun off from a state-owned enterprise group. It was a landmark acquisition case in which a nonstate entrepreneurial firm took over a state enterprise that had a strong name brand and national reputation. The two companies have different resource bases, history, tradition, corporate culture, management style, product features, and reward systems. They were traditionally close rivals located in the same township. The combined capacity will make the new Kelon-Huabao the top air conditioner manufacturer in terms of market share, assuming a successful merger and integration.