In October 2005, BenQ acquired the mobile phone department of Germany’s Siemens, a long-established communications equipment manufacturer. At the time, it was claimed to be copying the second “Sony Ericsson model.” BenQ CEO Li Kunyao said He even made the bold statement of "let other Chinese companies have an example of acquiring overseas companies." However, the new company has continued to suffer losses since its establishment. As of September this year, its own brand and OEM mobile phone business has incurred losses of up to 840 million euros, equivalent to approximately 12.6 billion yuan.
In view of the above and other objective reasons, BenQ’s board of directors passed a resolution on September 28 and decided not to invest in BenQ’s mobile phone subsidiary in Germany. BenQ’s German subsidiary also plans to apply for insolvency protection from the German government ( insol-vency protection), and handed over the company's operating rights, but retained the BenQ Siemens mobile phone brand and sales. The word "insol-vency" also has the connotation of bankruptcy, and this process is similar to filing for bankruptcy protection.
At present, the number of BenQ subsidiaries that have filed for bankruptcy protection in Germany has increased to 4. They are BenQ Mobile GmbH & Co.OHG and BenQ Mobile Management GmbH. , BenQ Wireless GmbH and Inservio GmbH, a marriage that seemed to be a "full moon" at first finally reached the edge of breakup.
Siemens joins hands with BenQ
The history of Siemens mobile phones can be traced back to 1986, when Siemens launched its first mobile phone - the 19-pound C1. At that time, BenQ had just given birth to two mobile phones. Year. In 2001, Siemens' market share in China reached 13, ranking third. In the blink of an eye, in the third quarter of fiscal year 2004 (the quarter ending June 30, 2004), Siemens' mobile phone business suffered a loss for the first time, and it has been unstoppable since then.
Siemens mobile phones were also a well-known brand back then
In 2005, the Siemens mobile phone business, which contributed less than 7% of Siemens’ overall turnover, had accumulated losses of 510 million euros, and its market share It has slipped to 5.5, handing over the fourth position to South Korea's LG. In 2005, the Siemens mobile phone department was already like a twilight old man.
In contrast, BenQ’s mobile phone business entered the mobile phone market in 1994, but it was not until the official separation from Acer at the end of 2001 that it entered the private-brand mobile phone market on a large scale. By 2004, BenQ's mobile phone shipments had exceeded 15 million units, accounting for 2% of the global market share; however, most of them were OEM production, and its own brand share was limited. However, BenQ CEO Li Kunyao, who is very adventurous, has always had high expectations for the mobile phone industry, and has made no secret of his dream of making it a "flagship product". He claims to increase annual production to more than 50 million units, and he reveals that he is as young as Such vitality.
BenQ is full of vitality
Siemens and BenQ, one is too old and the other is too new, but at the time, it seemed that this was a good opportunity to combine the two, so a "transnational marriage" "It was achieved naturally.
Paid dowry
In ancient China, most of the married women of landlords and wealthy families had very generous dowries. Looking back at that time, Siemens could be regarded as a "foreign rich man" and paid a "dowry" of 250 million euros to "marry" the mobile phone department to BenQ.
Siemens and BenQ signed a merger agreement for the mobile phone department in June 2005. The agreement will include the transfer of production lines in Camplinburg (Germany) and Manaus (Brazil), as well as the German headquarters and marketing and sales organizations to BenQ.
According to the agreement reached by the two parties at that time, in addition to filling the debt hole of 500 million yuan out of its own pocket, Siemens will also provide BenQ with 250 million euros in cash and services, and purchase BenQ shares for 50 million euros, accounting for 2.5% of its shares, becoming BenQ. its strategic shareholders. I don’t know how many Chinese companies were envious of such a generous “dowry” at that time.
BenQ Chairman Li Kunyao made the wrong calculation this time
At the same time, Siemens has also found a way out for the Chinese business group: in the future, various commercial activities of the mobile phone business in the Chinese market will be Conducted under the name of a joint venture between BenQ and Siemens, BenQ promises to make full use of the various functions of Siemens Mobile Phones' original institutions in China within three years. Siemens' factory in Shanghai still serves as a research and development and production center. Based on the results of negotiations with the Chinese partners of the joint venture, BenQ will also acquire the mobile phone production of the factory in the next step.
BenQ Chairman Li Kunyao confidently stated that the new company will turn losses into profits in the fourth quarter of 2006. But one year later, the mobile phone sales of the new company BenQ Siemens have fallen from the first echelon to the second echelon, the market share has dropped from the previous 6 to 3, and the book loss has exceeded 600 million euros.
New products cannot save BenQ's fate
In order to make up for the losses, BenQ even used the 300 million euros "dowry" originally given by Siemens. BenQ estimates that if it wants to save the "Mingxi" mobile phone business, it may have to invest an additional 800 million euros. This will make BenQ, whose stock price has dropped from NT$35 to less than NT$17, and whose total market value has evaporated by half, to bear the burden independently. It's impossible. But in fact, as of today, everyone has reached the point of breaking up.
Confusion about mergers and acquisitions
In the history of world business, there have been many cases of joint venture failure. They were due to disputes over interests, control, brands, differences in strategic orientations, and even culture. Problems such as being unable to integrate lead to turning against one another and parting ways. In the United States, due to a deficit as high as US$98.7 billion, Time Warner had to reluctantly delete AOL from the company name in 2003. In this way, the perfect marriage of the century came to nothing in just three years.
The timing is gone
As we all know, you need to choose an auspicious day to get married, and a joint venture between companies also needs to choose a day. The wedding between BenQ and Siemens was held in June 2005. Is this the auspicious day for BenQ to marry Siemens? This is not the case.
Since the end of 2004, Nokia and Motorola have increased their attention to the Chinese mobile phone market and have improved their channels. Local mobile phone companies have lost the channel advantages they relied on for survival, and their market share has declined sharply. Half of the country has dropped to around 40, and continues to decline.
At the same time, local mobile phone companies Bird, Amoi, TCL, Konka and other companies also suffered losses for the first time in 2005. Moreover, the once-famous Southern Hi-tech, Panda, and Dibit also declared bankruptcy, and Japanese mobile phone companies such as Panasonic and Mitsubishi also failed to bear the market pressure and lost their jobs in Maicheng.
In addition, with the implementation of the mobile phone license approval system, more and more companies have obtained mobile phone licenses, and the mobile phone market has experienced a serious oversupply situation. This has led to frequent price wars and unprecedented competition in the mobile phone market. The situation is fierce, and the Chinese mobile phone market can be said to be in chaos. BenQ and Siemens got married in such chaotic days. Due to the lack of timing, the marriage between BenQ and Siemens could not find a suitable running-in period, which was destined to lay the foundation for future misfortunes in marriage.
Doesn’t occupy any advantage
A good marriage must be supported by reliable financial resources. How can you think about love when you don’t have enough to eat? As an OEM company, BenQ has made achievements in the fields of LCD monitors and personal PCs, but after all, it is still relatively young and has only accumulated a few hundred million euros in wealth.
In addition, Siemens' mobile phone division had already suffered a loss of US$1 billion as early as 2001 and was preparing to sell the mobile phone division, but it has not found a suitable buyer. Due to the lack of funds between the two, BenQ and Siemens have no funds to use as "expenses" during the wedding adjustment period.
In addition, since BenQ has been working as an OEM before making its own brand of mobile phones, it does not master core technologies and patents, so it cannot achieve cost advantages; while Siemens has patents for some mobile phones, but the number of patents and Compared with Nokia, Motorola and other companies, the level is not leading and top level. Therefore, after the marriage of the two, they are also in a state of scarcity in terms of patents, making it difficult to achieve technological leadership, and to a certain extent, delaying the launch of new products.
It’s hard to talk about harmony between people
The weather is not as good as the right place, and the right place is not as good as the harmony. It can be seen from this that human harmony is the most critical condition among the three conditions. So how is the relationship between BenQ and Siemens going?
The cultural differences between the East and the West are a difficult problem for internationalization
BenQ Electronics is a Taiwanese company with a fast market response and a sensitive grasp of fashion. We can compare BenQ to a An energetic young man. Siemens is a century-old German company with profound German culture, slow response to the market, and a more rigorous style. Siemens can be compared to a steady old man. It would be too far-fetched for a young man to marry an old woman. Due to their different ways of doing things and personalities, it will inevitably lead to their inability to be harmonious.
After BenQ acquired Siemens Mobile Phones, it sent two Taiwanese supervisors to manage 3,000 German employees. Because the German employees regarded themselves as aloof and did not obey the management of the Taiwanese supervisors, it was difficult to achieve smooth work. Discord developed between Taiwanese supervisors and German employees. This has led to a series of problems such as new products being unable to be launched on schedule.
It can be seen from this that the marriage between BenQ and Siemens does not have the right time, place and right people, so it is difficult to achieve a happy marriage. According to statistics, most corporate mergers in the world are unsuccessful. Conil Consultants examined the 50 largest mergers and acquisitions between 1990 and 2000 and found that 69 lagged behind the industry average in overall stock price return recovery two years after the deal was completed. Therefore, under the current world economic conditions, mergers and acquisitions are not the best choice for enterprises.