Dec. 28 (Bloomberg) -- Zoomlion Heavy Industry Science and Technology Co., China’s second-biggest construction equipment maker by market value, offered $236 million to buy the remaining 41 percent stake in a unit from Goldman Sachs Group Inc. and other investors.
Zoomlion will fund the purchase with its own cash, the company said in a statement to the Shenzhen stock exchange today. The unit, Zoomlion CIFA (H.K) Holdings Co., was formed after the Chinese equipment maker and investors including Goldman acquired Compagnia Italiana Forme Acciaio SpA, known as CIFA, in 2008.
“This will accelerate Zoomlion’s push for international expansion,” the company said in a separate e-mailed statement. “Zoomlion will better integrate CIFA’s business.”
Zoomlion bought its 60 percent stake in the Italian company for 163 million euros ($215 million) as it sought advanced technologies in concrete pump manufacturing. Zoomlion and bigger rival Sany Heavy Industry Co. are stepping up overseas acquisitions after demand at home slowed following Chinese government curbs on the property market.
Goldman owns 12.8 percent of Zoomlion CIFA, while Chinese private-equity company Hony Capital has 17.8 percent. Chinese-Italian buyout fund Mandarin Capital Partners holds 8.9 percent. The three investors had paid 108 million euros for the stake. In 2009, CIFA management bought a 1.1 percent holding.
Zoomlion fell 1.4 percent to close at HK$11.52 in Hong Kong trading. The city’s benchmark Hang Seng Index rose 0.2 percent. The announcement was made after trading hours.
Concrete machinery was the biggest revenue contributor to Zoomlion last year, according to data compiled by Bloomberg. The company’s first-half profit rose 21 percent to 5.6 billion yuan as the focus on concrete pumps helped offset slumping demand for excavators.
Sany Heavy, China’s biggest maker of excavators, and a partner paid 360 million euros for German concrete-pump maker Putzmeister Holding GmbH in April.
To contact the reporter on this story: Jasmine Wang in Hong Kong at firstname.lastname@example.org
To contact the editor responsible for this story: Vipin V. Nair at email@example.com