Chinese boost for forklift firm
August 31, 2012
State-owned construction equipment manufacturer Shandong spent 738 million euros ($925 million) on newly-issued Kion shares - amounting to a quarter stake in the firm - the German forklift manufacturer announced on Friday.
The deal was made through Weichai Power - a subsidiary of the Chinese state-owned company - which becomes Kion's third-biggest shareholder after financial investors Kohlberg Kravis Roberts (KKR) and US-based investment firm Goldman Sachs.
Kion is the world's second-largest forklift manufacturer, with revenues of 4.4 billion euros in 2011, and an operating profit of 365 million euros.
However, the company, which is based in Wiesbaden, Germany, is saddled with debt to the tune of 2.6 billion euros, and in need of fresh funding for restructuring.
Current owners KKR and Goldman Sachs have cut funding after several unsuccessful attempts to go public with the firm in recent years.
Speaking at a news conference, Kion Chief Executive Gordon Riske reaffirmed his determination to publicly list the manufacturer, saying that the Chinese participation had made the goal "reachable."
Hydraulic and motoring power
Weichai Power, which was given the right to increase its stake to 30 percent after a Kion stock floatation, is said to have a prime interest in Kion's hydraulic and motoring technology, considered to be at the cutting edge of the industry.
The takeover is the biggest Chinese investment in Germany to date, and part of the Asian country's intensified efforts to acquire German know-how and market access via corporate buy-outs.
In 2012, Chinese takeovers, for example, included German concrete pump specialist Putzmeister, bought by Sany Group for 360 million euros, as well as solar industry firms Sunways and Solibro, which were acquired by their Asian competitors.
Meanwhile, it is being speculated that German machine-tool manufacturer MAG might be the next candidate for a Chinese takeover, in a deal estimated to be worth 500 million euros.
uhe / rc (AFP, dpa, Reuters)