LiuGong: Integration Challenges in Poland (A)

This case series tells a story of post-merger integration, depicting a string of challenges faced by Guangxi LiuGong Machinery Co., Ltd. during its cross-border M&A. As a large SOE specialized in R&D, manufacturing and construction equipment sales, LiuGong was one of China's most internationalized companies, setting a prime example for local peers in the construction machinery sector with global aspirations. The case series comprises two parts: Case (A) and Case (B). Case (A) introduces the background of LiuGong's globalization strategy, summarizes the acquisition of the civil construction machinery division of Polish state-owned firm HSW as well as its wholly-owned subsidiary Dressta, and describes the integration process of LiuGong Poland, managed by former HR Director Teddy Wu, who was appointed General Manager of LiuGong Poland at a critical moment. China headquarters deployed him to Poland with a series of missions to carry out. After the acquisition, wholly-owned Dressta continued to operate independently, but its performance fell short of expectations, and a significant part of its operations overlapped with those of LiuGong Poland. One of the first major decisions Wu faced was to determine whether merging Dressta with LiuGong Poland was necessary.