Zongshen Power Machinery, a Shenzhen-listed motorcycle maker, may partner with United States-based MTD Products to buy engine manufacturer Chongqing Zongshen General Power Machine for almost 300 million yuan, sources said. Zongshen Power, based in southwest China, would sell up to 110 million shares at 5.03 yuan each, the sources said. The proceeds will be used for buying 75 per cent of Chongqing General from its controlling shareholder and investing in two other production units. The share sale is awaiting approval from the China Securities Regulatory Commission. The remaining 25 per cent of Chongqing General, held by a Hong Kong holding company, will be taken up by MTD, a US-based outdoor power equipment maker. The deal could be finalised by the end of this year, sources familiar with the move said. The appraised value for Chongqing General was 297.5 million yuan, sources said. Chongqing General produces engines under the 'Zongshen' brand name for diesel electricity generation machines, harvesters and sprayers, mostly for export. The profit margin for producing outdoor machinery, almost 10 per cent, was wider than the 6 per cent earned in making motorcycle engines, Yu Zhonglin, the securities representative of Zongzhen Power Machinery, said in a telephone interview. Chongqing General made a full-year profit of 33 million yuan last year and 24.9 million yuan in the first half of this year. Full-year earnings this year are estimated at 50.07 million yuan, according to data from the company. Declines in the selling price of the company's main products had eased, said the appraiser of the deal. '[We] do not rule out that the product selling price will rebound or remain at the current level.'