Vossloh Said to Weigh Transport Sale as Chinese CircleManuel Baigorri, Aaron Kirchfeld and Jonathan Browning
Vossloh AG, the world’s largest maker of rail fasteners, is weighing a sale of its transportation division and has been approached by at least one potential Chinese buyer, people familiar with the matter said.
The transportation unit, which may be valued at as much as 600 million euros ($787 million), has attracted interest from Chinese rail companies such as China Railway Materials, said the people, who asked not to be identified as talks are private. Vossloh, a family-owned company based in Werdohl, Germany, is working with UBS AG to explore a possible disposal of the locomotive maker, they said. No decision has been made.
“The transportation unit could be interesting for a Chinese buyer because it offers entry into the European market and is the region’s largest maker of diesel-electric locomotives for shunting and mainline applications,” said Holger Schmidt, a Frankfurt-based analyst at Equinet AG, who has an accumulate rating on the stock. Shunting is switching a rail car from one track to another.
Vossloh shares rose as much as 2.39 percent to 79.20 euros on the news, the biggest increase since Feb. 18, before closing at 76.75 euros in Frankfurt.
The potential sale comes as the Vossloh family, which owns more than 30 percent, competes for influence with German billionaire Heinz Hermann Thiele, who has bought more than 25 percent of the company, leading to speculation he wants to combine Vossloh with his brakemaker Knorr-Bremse AG. The transportation unit, with plants in Valencia, Spain, and Kiel, Germany, says it is Europe’s biggest manufacturer of modern diesel locomotives, with the division accounting for 36 percent of Vossloh’s sales in 2012.
No Thiele Synergies
The transportation division doesn’t offer synergies with Vossloh’s rail infrastructure business, and has lower profit margins, Schmidt said. There aren’t too many synergies between the unit and Knorr-Bremse if Thiele gains control of the company and oversees a merger, he said.
Vossloh shares have gained 16 percent in the past 12 months, buoyed by takeover speculation and rising sales, valuing the company at 1 billion euros.
The Vossloh family is concerned about Thiele’s actions, Handelsblatt reported last month, citing an unidentified spokesman. Thiele was named chairman of the supervisory board on June 5, according to the company.
Thiele’s push to become chairman reflected “a strategic rather than a pure financial interest,” Commerzbank AG said on May 31.
China CNR Corp. and CSR Corp., the country’s largest train makers, may also be interested in the transportation unit, two people said.
Vossloh doesn’t comment on “rumors and speculation,” a spokesman for the company said. Shao Renqiang, secretary of CSR, didn’t return calls seeking comment and China CNR said in an e-mail that is has no information regarding Vossloh. An outside spokesman for China Railway Materials declined to comment.
The Vossloh transportation unit, which also builds trams and suburban trains, reported a 28 percent increase in 2012 earnings before interest and tax to 35.5 million euros, on sales of 451.1 million euros, according to a presentation in March.
The larger rail infrastructure unit, which builds parts that fasten train tracks to the ground, posted sales of 792.4 million euros and Ebit of 81.7 million euros.