Sany Heavy in deal for Austrian lifting gear firm
Building machinery maker signs memorandum of understanding for 10 per cent of Palfinger
Sany Heavy Industry, China's largest listed construction machinery maker, plans to pay €108 million (HK$1.13 billion) for 10 per cent of Austrian firm Palfinger.
The deal, under a memorandum of understanding signed this week, will also result in Palfinger investing €110 million for a 10 per cent stake in Sany's two lifting machinery subsidiaries, Sany said yesterday. Palfinger is one of the world's leading lifting machinery makers.
The final contracts, to be drafted in a few weeks, will require the approval of Chinese regulatory authorities, Sany Heavy's board and Palfinger's supervisory board, Palfinger's website said.
Sany Heavy is a Shanghai-listed subsidiary of Sany Group, China's biggest construction machinery conglomerate. It is controlled by Liang Wengen, who was listed by Forbes as China's richest man in 2011.
Xiang Wenbo, president of Sany Heavy and Sany Group, said: "Together with Palfinger, we can develop the globalisation of Sany."
Hubert Palfinger, deputy chairman of the supervisory board of Palfinger, said: "We are happy to have a strong partner as the second largest shareholder."
Vik Chopra, a Sun Hung Kai Financial analyst, said: "Cross-border deals like this allow Chinese companies to access world-class technologies and allow developed-market companies to gain a foothold in China."
In the first half, Sany Heavy's overseas sales soared 66.5 per cent to 5.44 billion yuan, accounting for 24.6 per cent of its total revenue. However, Sany Heavy's total revenue fell 30.5 per cent to 22.08 billion yuan, while net profit declined 48.6 per cent to 2.65 billion yuan.
Last year, Sany and Palfinger established two 50-50 joint ventures; one in China and the other in Austria.
The China joint venture, Sany Palfinger Equipment, makes machinery for the mainland and overseas market. The Austrian venture, Palfinger Sany Mobile Crane International Sales, distributes Sany's mobile cranes in Europe, the former Soviet Union and the US.
Palfinger chief executive Herbert Ortner said: "This consolidation of our strategic partnership is the basis for the further expansion of our co-operation."
In July, Sany Heavy paid US$54.9 million for a 10 per cent stake in German concrete pump maker Putzmeister, completing its acquisition of the whole of Putzmeister. Sany Heavy acquired 90 per cent of Putzmeister for €324 million last year.
Last month, Putzmeister chief executive Norbert Scheuch resigned from his firm and as senior vice-president of Sany Heavy, Sany Heavy earlier announced. Sany Heavy senior vice-president Gerald Karch becomes Putzmeister's acting chief executive.