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Seeking new opportunities overseas

By CAI XIAO (China Daily)

08:26, March 11, 2013

Europe seen as easier location than the United States for business deals

Sany Group Co and Zoomlion Heavy Industry Science and Technology Development Co, China's two biggest construction-machinery makers, have both successfully integrated their European assets and will continue to pursue acquisitions overseas.

Sany and CITIC Private Equity Funds Management Co paid 360 million euros ($475 million) in April 2012 for concrete-pump maker Putzmeister Holding GmbH to add technology and expand overseas. Putzmeister is a German company that was one of the biggest operators in the sector of concrete pumps for about 30 years.

"Although the deal was completed within a year, the revenue of Putzmeister increased a lot in 2012. The company's unions and staff are satisfied with the new management," said Zhu Gang, of CITIC Private Equity Funds, the man responsible for the deal. He declined to reveal detailed growth figures.

Zhu said the acquisition was important for technology, brand and a sales and service network in Europe. A Putzmeister/Sany combination could be an effective match, he insisted.

"We won't give up any opportunity for mergers and acquisitions and restructuring to strengthen Sany and we expect more mergers and acquisitions abroad," said Xiang Wenbo, president of listed unit Sany Heavy Industry Co.

Zoomlion also did successful M&A in Europe.

"The profit of Compagnia Italiana Forme Acciaio SpA in 2012 increased about 80 percent over that in 2008 when we acquired the Italian concrete machinery manufacturer," said Gao Zhen, a managing director at global equity private firm Mandarin Capital Partners that took part in the acquisition deal of CIFA with Zoomlion.

Zoomlion and investors of Mandarin Capital Partners, Hony Capital and Goldman Sachs purchased CIFA in 2008 for 271 million euros.

Gao said the integration of manufacturing deals is complicated. Since 2008 his company has kept the local teams as well as taken measures to improve supply chain management, production, research and development.

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