This is the first of a three-case series (309-320-1, 309-321-1 and 311-055-1). Shanghai Automotive (SAIC), one of China's 'Big Three' automakers, pays US$571 in 2004 to acquire a controlling majority share in Ssangyong Motors of South Korea to help SAIC achieve its strategic objectives of developing its own passenger car brand and expanding operations internationally. This first case covers the decision-making leading up to the deal, signed in October 2004 and implemented in January 2005. It provides a basis for comparing modes of growth options (make, buy or ally) and the specific challenges facing Chinese firms and other newly-internationalizing firms as they go abroad. The case also generates discussion of fundamental acquisition issues: target selection, assessment and integration planning.
