Houston is a city reflective of mergers and acquisitions. Let’s take a look at how a company from Japan and one from Houston joined together and formed a strong partnership.
Daikin Industries Ltd. is a leading global HVAC company that believes in the concept of manufacturing products within the country or geographic territory where they are installed. This provides for inventory replenishment and necessary product alterations that might be required in one country but not another.
Goodman Global Group Inc. was the second-largest domestic HVAC manufacturer in North America. Both Daikin and Goodman were aware of each other, but not on a competitive basis as neither company manufactured similar products.
Here’s a look at how they came together.
Filling a need
Daikin approached Goodman about making an air handler needed for one of its companies. During that time, each gained extensive insight into the cultures of the other and the product was developed and introduced successfully into the market.
Both companies were impressed with the organizational methods shared during the development of the final product and those positive feelings paved the way for a great partnership.
Daikin planned to launch energy-efficient products for residential and commercial HVAC markets in North America, the largest HVAC market in the world. The plan was to have the owner of Goodman meet with top management at Daikin.
Talks were suspended when the earthquake and tsunami struck Japan, but after a year’s hiatus, the discussion resumed.
During this time, Daikin focused on the ability of creating an organization to support multiple brands, increase its distribution network and support the continued growth of its partner.
Acquiring Goodman was referred to as a complementary merger — Daikin’s environmental technology, engineering and labor support along with Goodman’s efficiency in manufacturing, distribution and supply chain management.
The first U.S. made variable refrigerant flow unit was released in a short period of time. Leadership was a shared responsibility between Daikin and Goodman employees. Quality remained the No. 1 goal.
The complementary aspect of this acquisition is a testimony to how quickly their goal was achieved in producing its first product. Each realized they could not do it alone. The combined expertise and efficiency of both companies and the tireless efforts of their employees helped accelerate the assembly line product and made it a success that can be transferred to other Daikin organizations around the world.
Learning from an acquisition process never stops. One lesson learned from this merger is that beyond the financial implications of acquiring and merging two successful companies, both groups must seek the complementary benefits that exist to make the new organization stronger.
Both companies benefit from an effective merger. It is shortsighted to think that one company will have all the answers to successfully build a better company.
Good partnerships deliver outstanding opportunities. Daikin was fortunate to have had the opportunity to view Goodman as a manufacturing partner many years prior to the acquisition. The goal is to make the entire Daikin group stronger and capable of even more growth. ●