Cultural Differences and Communication Issues in International Mergers and
Acquisitions: A Case Study of BenQ Debacle
1. Introduction
Taiwan has spawned many top-tier electronic component vendors and contract manufacturers. As profit margins for contract manufacturing begin to shrink, Taiwanese executives see moving beyond low-cost manufacturing as vital for a profitable future. Taiwanese companies try to make a shift from being an anonymous contract manufacturer to building their own brand names. One way to an immediate global presence is to acquire an attractive existing brand. In this case, it was concerned about BenQ, a Taiwanese based company, which acquired the money losing mobile phone division of Germany Siemens company and launched the brand, BenQ-Siemens company by merger strategy.
The international headlines on June 7, 2005 reported that BenQ, a Taiwanese based mobile manufacturing company when it acquired the money-losing mobile phone division of Germany’s Siemens and launched the new brand, BenQ-Siemens. With the merger, BenQ Mobile became the world’s fourth largest mobile phone brand after Nokia, Motorola, Samsung. However, the acquisition of Siemens’s mobile phone unit lost over 500 million euros in 2005, with little sign of financial recovery. In late September, 2006,the new brand BenQ-Siemens decided to stop further investing to this money losing operation mobile business unit and it needed bankruptcy protection from Germany Government assistanc