Case One Sample Clauses

Case One. The SOE of Case One (hereinafter referred to as ‘Company H’) was established in 1969 and it employed 2,300 staff before the acquisition. It had been the economic backbone of local city and it is the only manufacturer of the sector to which it belongs in the province. Its biggest market was in America as the 40 per cent of its products were sold to America, as in North America. 20 per cent of its products were sold to other countries and almost all the rest of its products (30 per cent to 40 per cent) were sold within China. Company H chose the acquisition due to three reasons. First, it expects to expand its market share. The acquirer is a globally well-known company whose market share covers North America, Europe and Asia. Company H will expand its overseas market through the acquirer. Second, it desires financial support. Company H could not maintain production before the acquisition due to external environmental influences such as rising raw material prices. Under such circumstances, it was confronted with two options: to go bankrupt or to be acquired. Unlike bankruptcy, acquisition would mean employees’ jobs would be retained. The third reason for choosing the acquisition is that Company H has co-operated with the acquirer since 1996 and is therefore well-acquainted with the acquirer. The acquirer chose Company H as a target for four reasons. First, although Company H did not operate well, it possesses outstanding research and development (R&D) staff and has a high manufacturing ability. Second, the acquirer has maintained a close relationship with Company H because of long-term co-operation and it bought 70 per cent of Company H’s products. Third, the market positioning of Company H, which is ‘A variety of types and a small batch of production’, is the same as the acquirer’s. Fourth, the acquirer realised that purchasing products from other companies was not a sustainable method for corporate expansion; instead, establishing its own manufacturers is an appropriate strategy for corporate development. Company H, as a supplier, was the first choice for the acquirer. The acquisition was carried out in June, 2006. After the acquisition, Company H had 1,300 employees and the ownership was transferred from state-owned to wholly foreign-owned. The acquirer controlled the final decision-making of Company X. Xx appointed two expatriates as General Manager and Deputy General Manager; and recruited a Chinese employee as Chief Engineer and two Chinese Canadians as...