Professor Fan Libo has cooperated with a professor from Fisher School of Business, Ohio State University for three years to closely observe and interpret the experiences of making investment and running by transnational enterprises in China for more than 30 years. Recently, these two authors have co-authored Nestlé and Totole, A Foreign-Invested Enterprise in China and it has been accepted by The Richard Ivey School of Business, The University of Western Ontario (“UWO”), the second biggest case research institution in the field of international business education.

The case was on the background of the development of China’s chicken essence industry and took the merger of Shanghai Totole by Nestlé as its core. Chicken essence is a new generation seasoning since the invention of MSG (invented by a Japanese company in 1903) and was researched and developed in 1984 by Mr. Rong Yaozhong, the founder of Shanghai Totole Food Co., Ltd. In 1994, the American company Bestfood entered China and aggressively promoted chicken essence named “Jia Le”. In the same year, a subordinate brand of chicken essence of Nestlé named “Mei Ji” had its factory in Dongguan, which produced delicate flavor soybean sauce and also provide middle and high-end markets with chicken essence named “Mei Ji”. Two transnational enterprises entered Chinese markets, which improved the overall technological level and quality of products of chicken essence industry. In 1999, Nestlé purchased 80% of shares of Shanghai Totole Seasoning Foods Co., Ltd. And then the scale of operation of Totole increased from 3000 tons in 1999 to 130 thousand tons in 2014. The scale of operation of Totole has increased rapidly for many years and its sales revenue has exceeded 4 billion RMB. Mr. Bao Bida who is current chairman of the board call Mr. Rong as “Father” of China’s chicken essence industry since foods produced by Totole was the most successful investment project in his lifetime.

The case also implied a new pattern of international enterprise management. Since the joint-ventures was entered into by two sides, Nestlé has always been appointing Mr. Rong Yaozhong, the founder of Totole, as general manager of the joint ventures, which created a new pattern for joint ventures management, namely “marry into” style of merger and acquisition and coach style of governance. Basic framework of this management pattern was published on the 12th issue of Management World, 2014 (Fan Libo, etc., 2014) and has a very strong guiding significance for Chinese enterprises’ practices of cross-border mergers and acquisitions and the integration.