IVEY PublishingW17210HUAYI COMPRESSOR BARCELONA: POST-ACQUISITIONCHALLENGESYingying Zhang and Adoracion Alvaro-Moya wrote this case solely to provide material for class discussion. The authors do not intendo illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and otheridentifying information to protect confidentiality.This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without thepermission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rightsorganization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, WesternUniversity, London, Ontario, Canada, N6G ON1; (t) 519.661.3208; (e) ; www.iveycases.com.Copyright @ 2017, Richard Ivey School of Business FoundationVersion: 2017-04-03The international expansion of Chinese firms into advanced economies that accelerated by the mid-2000screated many challenges and risks. Despite the high interest in such endeavours, little was known aboutthese firms’ motives or the merger and acquisition process. Against this backdrop, Huayi Group (HuayiCompressor Co. Ltd.) (Huayi), controlled by Changhong Group-a large Chinese state-owned industrialenterprise-set out to create a subsidiary in Barcelona, Spain, in May 2012. Huayi’s purpose was to acquirean international firm-Cubigel Compressors, S.A. (Cubigel)-the fourth largest commercial compressormanufacturer in the world. While labour complications and other difficulties developed during theacquisition process, by May 2013, Huayi had successfully managed the transition.Despite this initial achievement, challenges related to the recovery of productivity, markets, andprofitability continued. In January 2014, Darwin (Dawen) Huang, the general manager of HuayiCompressor Barcelona, S.L., who managed the transition, received a request to return to Huayi headquartersin Sichuan, China. From his Barcelona office, he grew concerned about several challenges: Who would bethe right successor for his position? What strategy did Huayi need to consolidate its internationalizationprocess? What knowledge could he transfer to the Changhong headquarters for future internationalstrategies?HUAYI COMPRESSOR GROUP: TRANSFORMING INTO A GLOBAL PLAYERHuayi was founded in 1990 in Jingdezhen, China (Jiangxi province), and listed on the Shenzhen StockExchange in 1996. In 2001, one year after being rebuilt in a joint venture format, the company became theindustry leader for sales and production in the Chinese market. To further its business expansion, in 2002,the company acquired 53.78 per cent of the shares of Jiaxipera Compressor Co., Ltd. Five years later, itwas acquired by Sichuan Changhong Electric Co., Ltd., one of China’s largest providers of consumerelectronic products.After a series of mergers and acquisitions, Huayi turned into an industrial group, Huayi Group. It controlledJingdezhen Honghua Appliance Parts Co., Ltd. (which manufactured compressor components); HuayiThis document is authorized for educator review use only by AJAY CHANDEL, Lovely Professional University until Apr 2020. Copying or posting is an infringement of ard.edu or 617.783.7860