Carlyle agrees to reduced 45pc Xugong stake
Carlyle Group and state-owned Xugong Group have confirmed that they have reached an agreement on the sale of a substantial stake in the mainland's largest construction equipment maker to the United States buyout fund, ending almost three years of talks.
The agreement signed on Friday saw Carlyle cut the size of the stake it planned to buy in Xugong Construction Machinery Group to 45 per cent from 50 per cent which effectively will leave the Chinese partner with a controlling stake.
The agreement will allow Xugong Group to have majority representation on the board of the soon-to-be sino-foreign joint venture, giving it five seats and Carlyle four; and the right to appoint a president.
Carlyle promised to retain the Xugong brand and assist Xugong Construction Machinery in developing new products. Completion of the deal is pending approval from the Ministry of Commerce.
Analysts widely expected approval was likely given the non-control nature of the deal.