INTEGRATION OF A MULTINATIONAL EUROPEAN COMPANY AND A BRAZILIAN COMPANY FOLLOWING A CROSS-BORDER OPERATION
Palfinger is one of the largest manufacturers of cranes and cargo-handling equipment in the world. Madal was the largest manufacturer of cargo-handling equipment in South America.
Success Case: In 2001, after intense negotiations extending for longer than two years, Palfinger AG acquired 100% of Madal's shares, becoming a leader in the cargo-handling equipment market in South America.
In acquisitions involving public and family companies, regardless of their size, post M&A integration processes are very delicate.
Our challenge was to strategically align Madal with Palfinger's expectations, without any loss in performance. The integration process went through cultural challenges, since the "Brazilian and European companies had their own agendas". Our main objective was to introduce European technology into a Brazilian market that wasn’t yet willing to pay for the price difference. We had to develop marketing and sales strategies, convincing Brazilian executives in this segment to change their mindset, so that we could achieve quality results.
This meant deeply understanding the culture of the stake holders and convincing them that both sides (Palfinger and Madal) would be winners in this collaborative process. All of this while maintaining market leadership and having to familiarize the NewCo to the expectations of a public player eager to implement changes without adequate knowledge of the local culture. Furthermore, we started this process in October 2002, when former president Lula was being elected and the dollar was being valued at R$4.00 and the prime rate had risen from 16% to 26% per year. Despite the challenges revenues and EBITDA increased by more than 70% in two years.