Sany of China to buy Putzmeister2 February 2012
Construction machinery manufacturer Sany Heavy Industry based in Changsha, China is to take over the concreting specialist Putzmeister of Aichtal, Germany, subject to regulatory approvals. Putzmeister has described the move as a merger in which both partners benefit substantially from the combination. Both agreed not to disclose the purchase price.
The deal is also described by the Putzmeister family firm as the largest Chinese-German transaction to date, and also the first time that a company in the ‘Mittelstand’ engineering backbone of the German economy has merged with a Chinese company. Putzmeister will benefit from greater financial strength to secure growth prospects and competitive advantage, it is claimed, whilst Sany acquires cutting-edge technology and a strong distribution and service network outside of China.
The investment by Sany has a large financial input from the Chinese private equity company CITIC PE Advisors (Hong Kong) as a minority shareholder, but thereby allowing the 100 per cent purchase of Putzmeister. Morgan Stanley acted as financial advisers to Putzmeister.
Sany is a large Chinese producer and market leader in concrete pumps in China. Aichtal will become Sany’s new international HQ (excluding China) for concrete machinery, while Sany will concentrate on operations in China, handling Putzmeister as a premium brand.
Karl Schlecht, the founder of Putzmeister, commented, “Sany is one of the few large Chinese conglomerates that is personally operated by the founder (Liang Wengen), who is also the majority shareholder. In fact, Liang Wengen is one of China’s most successful entrepreneurs. He not only shares our entrepreneurial spirit, but also Putzmeister’s visions and corporate values.” The entire proceeds of the transaction will be transferred to the benefit of Karl Schlecht Gemeinnutzige Stiftung (KSG – 99 per cent) and Karl Schlecht Familienstiftung (KSF – one per cent).
Liang Wengen, chairman of Sany, also commented, “With this merger Putzmeister and Sany will create a new and global market leader for concrete pumps. Putzmeister will remain as an independent brand with its own management within the Sany group. We are looking forward to working with the Putzmeister management that makes this business so successful.”
Last year Putzmeister employed 300 people and generated about EUR 570M (USD 751.4M) in revenue. It has a long-standing marketing agreement with the Sika Group for the marketing of concrete spraying systems and, in May last year, announced a distribution agreement with GHH of Germany and MineMaster of Poland for drilling jumbos, rock-bolting rigs and load-haul-dump vehicles. These two companies also form a global alliance with Schmidt, Kranz & Co.
Sany Heavy Industry was founded in 1994 as a private company. It is part of the Sany Group that has about 70,000 employees in over 150 countries. This will not be Sany’s first presence in Germany as it made the claimed previously largest investment of a Chinese company in Europe (EUR 100M – USD 131.6M) with a 2009 agreement to open an R&D facility near its production facility in Cologne. In November 2011 it delivered its first product made in Germany – a 12m3 dry concrete mixer trialled with an Italian customer and made in Bedburg.
A major competitor of Putzmeister, CIFA of Italy, became part of the Zoomlion engineering manufacturing group, also of Changsha, China in 2008. The Putzmeister statement indicates that the presence of German directors on the Chinese board, and vice versa, may follow a similar operating structure. Norbert Scheuch will remain as Putzmeister CEO and will join the Sany executive board.
Karl Schlecht, founder of Putzmeister A Putzmeister pump used to pump concrete up to 1400m in the recently completed Lainzer Tunnel in Vienna, Austria Liang Wengen, chairman and founder of Sany