Sany, Citic to Pay $475 Million for German Cement-Pump Maker Putzmeister
Sany Heavy Industry Co. (600031), headed by China’s richest man, and a partner will pay 360 million euros ($475 million) for concrete-pump maker Putzmeister Holding GmbH to add technology and expand overseas.
The Chinese construction-equipment maker will buy 90 percent of Putzmeister for 324 million euros and Citic PE Advisors (Hong Kong) Ltd. will purchase the balance, it said in a Shanghai stock exchange statement yesterday. The deal may be completed by March 1, pending regulatory approvals, the Changsha, China-based company said.
Sany climbed to the highest in more than two months in Shanghai trading after announcing the deal and saying that profit probably rose more than 60 percent last year. Zoomlion Heavy Industry Science & Technology Co. also plans to build a plant in the U.S. as Chinese construction-equipment makers seek to challenge Caterpillar Inc. and Komatsu Ltd. (6301) internationally.
“The Putzmeister brand will give Sany an appeal that it doesn’t have at the moment to customers in developed countries,” said Liu Rong, an analyst with China Merchants Securities Co. “This deal is also a milestone. Who could have imagined even a few years ago that a Chinese company would buy such a renowned firm?”
Putzmeister, based in Aichtal, Germany, supplied pumps used to build Dubai’s Burj Khalifa, the world’s tallest building, and ones that helped quell the nuclear disaster in Fukushima, Japan last year. Sany plans to make Aichtal its headquarters for concrete machinery following the Putzmeister deal, it said in a Jan. 27 statement. Norbert Scheuch will remain head of Putzmeister under the new owner.
The German company, founded by Karl Schlecht, employs 3,000 people and probably had a profit of 6 million euros on sales of 560 million euros last year, Sany said. It’s being sold by shareholders Karl Schlecht Stiftung and Karl Schlecht Familienstiftung.
It took about two weeks for the two sides to agree on a deal, Sany Chairman Liang Wengen told reporters today at a briefing in Changsha. The company will pay for the acquisition from internal resources, said Vice Chairman Xiang Wenbo.
“With this deal, we’ve turned our most competitive international rival into one of us,” Xiang said. “It also reflects China’s rising position in the world’s construction- machinery industry.”
Chinese companies are making acquisitions overseas as they seek new technologies and as European companies struggle for funding amid a debt crisis. LDK Solar Co. (LDK), China’s second- largest solar panel maker, this month agreed to buy Germany’s Sunways AG (SWW), and Shandong Heavy Industry Group-Weichai Group agreed to acquire luxury-yacht builder Ferretti Group.
“The current debt crisis gives Chinese companies opportunities to buy,” Liu said.
Sany, controlled by Liang, climbed 1.6 percent to close at 14.21 yuan, the highest since Nov. 15. The benchmark Shanghai Composite Index rose 0.3 percent.
The company separately said profit probably rose last year after it sold more equipment and won market share. Net income was 5.61 billion yuan in 2010.
Construction growth has slowed in China as the government seeks to cool speculation and fend off a property bubble. Home sales (CHRESARE) rose at the slowest pace in three years in 2011, and expansion of investment in real estate slowed to 28 percent from 33 percent in 2010.
Sany, which makes excavators and concrete machinery, postponed a $3.3 billion planned initial Hong Kong sale last year, citing market conditions.
To contact the reporter on this story: Jasmine Wang in Hong Kong at email@example.com
To contact the editor responsible for this story: Neil Denslow at firstname.lastname@example.org
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.