China’s Weichai could raise Kion stake to one third

Kion, which is backed by KKR and Goldman Sachs, said the option to buy another 3.3% would come into effect if it pursued a public listing. In September, Weichai paid EUR467 million ($619 million) for 25% of the company and acquired a 70% interest in Kion's hydraulics business for a further EUR271 million. It is the largest Chinese direct investment in Germany to date.

Weichai can buy the 3.3% stake from Superlift Holding anytime between January 1 and June 30, 2013, or within three months of Kion completing an IPO. When Weichai first invested, Kion said that a public market offering remained a strategic aim, adding that the Chinese investment made this more probable.

According to market sources, the Weichai deal helped alleviate a large round of debt refinancing due next year. KKR and Goldman bought Kion in 2006 from German group Linde, reportedly placing an enterprise valuation on the company of around EUR4 billion - EUR2.6 billion in debt, EUR300 million in pension liabilities and another EUR1 billion in equity. The private equity investors put up a further EUR100 million in 2009.

Chinese companies are keen on purchasing high-end machinery assets in Germany. Earlier this year, Sany Heavy Industry, a Chinese construction-equipment maker, and CITIC Private Equity announced in January that they would invest EUR360 million in Putzmeister, a German manufacturer of high-tech concrete pumps.

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• Topics
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• KKR
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