CITIC PE teams up with Sany to acquire Putzmeister

Putzmeister has been struggling in recent years. Revenue fell by half during 2008 and 2009, and the company only generated EUR570 million ($751.8 million) last year, far lower than its record of EUR1 billion in 2007. In 2009, the company was overtaken by Sany as the world's largest concrete pumps manufacturer by sales.

Although Sany already has some overseas plants, its sales are still largely driven by domestic demand for construction equipment, which has been declining recently due to lower home sales. The company lacks a large-scale marketing channel in Europe.

Putzmeister's long-established brand will broaden Sany's presence in Europe. Karl Schlecht, the company's 79-year-old founder, sought outside investment having encountered trouble identifying a successor, the Financial Times reported, citing a person close to the deal. It also claims the value of the acquisition is somewhere in the region of EUR500 million.

Commenting on the deal, Schlecht said the merger is a global showcase transaction: "Sany is one of the few large Chinese conglomerates which is personally operated by the founder, who is also the majority shareholder."

Liang Wengen, Sany's chairman, said: "With this merger, Putzmeister and Sany will create a new and global market leader for concrete pumps."

This is not the first outbound transaction involving a local private equity firm. In May 2006, Hony Capital invested in Zoomlion and two years later supported the company's acquisition of Compagnia Italiana Forme Acciaio, in conjunction with Goldman Sachs and Mandarin Capital Partners.

The deal is another indication of Chinese companies' desire to expand overseas. Last week, John Zhao, CEO of Hony Capital, told the World Economic Forum in Davos that foreign prejudice against Chinese investment is unfair, adding that the global community should recognize that many domestic firms are taking their first steps into international markets and still learning the rules.

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• Topics
• Greater China
• Infrastructure
• Hony Capital
• Citic Private Equity