A Chinese machinery group is likely to buy German rival KraussMaffei Technologies, adding to a string of deals in which Chinese companies have scooped up German industrial know-how, two people close to the transaction said, according to a Reuters report. KraussMaffei Technologies is owned by private equity group Madison Capital, and is in “exclusive talks” with a Chinese bidder,” Reuters wrote.
(Reuters) – A Chinese machinery group is likely to buy German rival KraussMaffei Technologies, adding to a string of deals in which Chinese companies have scooped up German industrial know-how, two people close to the transaction said.
“The owner (private equity group Madison Capital ) has entered exclusive talks with a Chinese bidder”, one of the sources said, adding that the signing may take place soon.
The source did not disclose the name of the group that may buy KrausMaffei, which has common ties with defense group Krauss-Maffei Wegmann but today is an independent company.
According to sources familiar with the deal, initially interested groups from China including Haitian, Chen Hsong and Long Hong are currently not in talks with Madison, nor is any Western-based company.
To gain access to technology, brands and worldwide distribution, Chinese companies this year have acquired a number of German rivals, including machinery manufacturers Schwing and Putzmeister which were bought by XCMG and Sany, respectively.
Separately, Shandong Heavy Industry recently announced an investment in fork lift truck maker Kion Group, while car parts maker Hebei Lingyun acquired car door latches specialist Kiekert
Madison Capital, advised by Goldman Sachs, hopes to fetch as much as 700 million euros ($910 million) in the sale, the people said.
KraussMaffei, with a workforce of about 4,000 people, generated sales of just over 900 million euros and a profit in its financial year 2010/11 ending in September.
It traces its roots to a locomotives maker in 1838. The company later specialised in defence products and spun off its plastics technology into a separate unit, which in 1992 became a part of steel group Mannesmann.
After the breakup of Mannesmann in 2000, the Krauss-Maffei plastics and rubber machinery operations became part of a joint venture of Siemens and KKR. Madison Capital acquired the business in 2006.
In 2008, plans to list KraussMaffei on the stock exchange had been scrapped.
KraussMaffei and Goldman Sachs declined to comment. Madison was not available for comment. ($1 = 0.7660 euros) (Reporting by Arno Schuetze and Alexander Hübner in Frankfurt and Denny Thomas in Hong Kong)