On September 19th, the timing of the delivery of the rubber and plastics business of Bogo, a subsidiary of China South Locomotive Group, was held in Damer, Lower Saxony, Germany. Bogo held a new company unveiling ceremony and flag-raising ceremony.
In the factory floor, the rumble of the machine continued, and the workers worked step by step on the assembly line. Except for the flag of the CSR Group, there is not much change here. Liu Hualong, president of China South Locomotive Group, said at the press conference that CSR Group promised that Bogo’s management team and headquarters would remain unchanged, the operating mechanism would remain unchanged, and the employee’s welfare would remain unchanged. CSR Group will further expand the content and scope of support for Bogo's original support on the ZF Group, support Bogo's development strategy, and not take the initiative to lay off employees.
The acquisition of a German company by a Chinese company has caused some doubts in the local area. In the questioning session of the press conference, it can be seen that the local media is particularly concerned about the future development, additional investment, and local employment of the company after its acquisition. Bogo CEO Torsten Bremer said at a press conference that more than 99% of Bogo’s employees are positive about the acquisition.
However, there is also a story behind the fact that German employees almost unanimously approve of the acquisition. Bremer told this reporter that the initial employees were also nervous about the acquisition from China. “Although our factory has only 1,800 employees, the employees have collected 40,000 signatures against M&A, including other ZF employees, who are worried about ZF’s sale of large business segments.” I was deeply pressured by the silence.
In contact with CSR Group and Times New Materials, Bogo's management is interested in investigating whether China's commitment can be fulfilled or whether its willingness to invest can last. At the same time, Bremer himself personally visited the leadership of many German companies acquired by Chinese companies to understand the implementation of Chinese companies. “They all gave very positive and convincing answers, and Chinese investors are trustworthy.” Bremer was therefore encouraged.
The management of Bogo finally chose to abandon the ZF Group and stay in Bogo to join the CSR Group. They then persuaded the middle managers, who in turn passed on the trust of Chinese companies to the grassroots. “The mood of employees has changed a lot, from fear to hope, and now they are looking forward to the future.”
The main business of Times New Materials is to supply vibration and noise reduction products and polymer composite materials for the rail transit industry and other industrial fields. Bogo is the world's third largest supplier of automotive vibration and lightweight components, with a senior management team and experienced staff.
Times New Materials acquired the rubber and plastics business of the ZF Group in Germany for 290 million euros. This is China's largest acquisition in the auto parts industry in Europe. After the completion of the acquisition, Times New Materials will own all the assets of Bogo's related bases in Germany, the United States, France and China. Times New Materials will rise from the 30th to the 15th in the world non-tire rubber industry.
Liu Hualong told this reporter that CSR Group is optimistic about Bogo, because it can be organically integrated with the development of CSR Group and Times New Materials. The acquisition can complement the technology, management and resource advantages [-0.93%], enabling both parties to achieve a win-win situation.
Bremer said that the market layout of the two companies is complementary. CSR Group has a good market network in China. Bogo has good cooperation with European car companies, but they do not have a pure Chinese customer. Through the acquisition, both parties can share market advantages and exchange benefits in materials development and technical expertise.
It is understood that last year, Chinese companies conducted nearly 30 mergers and acquisitions in Germany, continuing the upsurge of Chinese companies' high-end manufacturing in Germany after 2010. Chinese Ambassador to Germany Li Xiaolan told this reporter that Germany is a key country for China to invest overseas. Although China’s investment in Germany is still relatively small compared to German investment in China, it has developed rapidly. Chinese companies hope to introduce German advanced technology and management experience in this form to enhance their competitiveness and achieve mutual benefit.
Wang Wei, an expert at KPMG, told this reporter that the overseas mergers and acquisitions of Chinese companies were a stage from 2000 to 2009. At this stage, Chinese companies have insufficient experience in M&A and their strength is insufficient. The main consideration of the acquisition is the price factor. At that time, some Chinese companies bought heavy-duty German companies, and they were burdened with heavy burdens. Some enterprises were even dragged down. After 2010, this situation is very rare. The strength of Chinese companies has increased and their experience has been enriched. In recent years, the qualifications of Chinese companies purchased by companies are mostly better. Several bankrupt enterprises including acquisitions have successfully turned losses into profits. Many companies have improved their core competitiveness through mergers and acquisitions.

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