China's XCMG buys majority of Germany's Schwing

(Reuters) - China's Xuzhou Construction Machinery Group (XCMG) has agreed to buy a majority stake in privately held German machinery manufacturer Schwing, the latest in a series of deals by Chinese companies to acquire German industrial know-how.

The German concrete pump maker, one of the world's leading suppliers in its field, did not disclose the price of the investment in its statement on Thursday. Reuters first reported a deal was imminent on March 23..

"The premium brand Schwing is a central part of our strategic development," XCMG head Wang Min said in the statement, which also said German management would remain in charge.

The deal follows a series of similar tie-ups this year in which Chinese firms have scooped up German groups to gain access to technology, brands and a worldwide distribution network.

In March, German car parts maker Kiekert said it was being bought by Chinese peer Hebei Lingyun..

In January, China's Sany Heavy Industry said it would buy Schwing rival Putzmeister in a 360 million euro ($472 million) deal, and LDK Solar invested in German solar group Sunways.

Schwing's concrete pumps are being used to build the new high-rise building of the European Central Bank in Frankfurt, Dubai's exclusive Jumeirah Beach Residence and New York's new One World Trade Center.

With the help of XCMG, Schwing hopes to expand onto Asian markets, the company said.

XCMG is seeking a U.S. dollar loan worth about 160 million euros ($210 million) to refinance a bridge loan to help finance the Schwing acquisition, Thomson Reuters publication Basis Point reported earlier this week.

Banks are invited to join the three-year term loan, with a road show scheduled for April 25 in Hong Kong, it quoted banking sources as saying.

Schwing, owned by the Schwing family, posted sales of roughly 500 million euros in 2011. It also posted a profit in 2011, a source close to the company said.

The Herne, Germany-based company employs about 3,300 staff, but is cutting 160 jobs after its sales dropped by 30 percent amid the economic crisis. After the investment by XCMG, no further job cuts are planned, a spokesperson said.

Rothschild advised Schwing on the deal.

($1 = 0.7621 euros) (Reporting by Arno Schuetze and Sabine Wollrab; Editing by Mark Potter and Jane Baird)

http://www.reuters.com/article/2012/04/19/xcmg-schwing-idUSL6E8FJC4720120419

China's Xuzhou Construction Machinery Group (XCMG) has agreed to take a majority stake in privately-held German machinery manufacturer Schwing as Chinese companies race to get their hands on German industrial know-how.

The German concrete pump maker, which is one of the world's leading suppliers in its field, did not disclose a price for the investment in its statement on Thursday. Reuters first reported a deal was imminent on March 23..

"The premium brand Schwing is a central part of our strategic development," XCMG head Wang Min said in the statement, which also said the German management would remain in charge.

The deal follows a series of similar tie-ups this year in which Chinese firms have scooped up German groups to get their hands on technology, brands and a worldwide distribution network.

In March, German car parts maker Kiekert said it was being bought by Chinese peer Hebei Lingyun..

In January, China's Sany Heavy Industry said it would buy Schwing peer Putzmeister in a 360 million euro ($472 million) deal, and LDK Solar invested in German solar group Sunways.

Schwing's concrete pumps are being used to build the new high-rise building of the European Central Bank in Frankfurt, Dubai's exclusive Jumeirah Beach Residence and New York's One World Trade Center.

Schwing, owned by the Schwing family, posted sales of about 400 million euros ($525 million) in 2010 and saw revenue rise by a double-digit percentage last year. It also posted a profit in 2011. The group has not disclosed more recent figures.

The Herne, Germany-based company employs about 3,300 staff, but is cutting 160 jobs after its sales dropped by 30 percent amid the economic crisis. After the investment by XCMG no further job cuts are planned, a spokesperson said.

Rothschild advised Schwing on the deal.

http://www.reuters.com/article/2012/04/19/xcmg-schwing-idUSL6E8FJ1U620120419

I dont know how much if this is true or not but here are just a few of the news stories.

Yes this news is correct. With the way the economy has been in the last few years it would be financially impossible for Schwing to compete with Putzmeister/ Sany. It is probably a smart move to save jobs with valuable employees.

I knew about this in December but Schwing asked me to keep it on the down low. I think Ken is right this is the best thing for Schwing.

But if Mc-Donalds is a winning company - even if they make bad products (their badtasting meanless hamburgers). Why can not Schwing - that make very good products, be a winning company?

XCMG has agreed to let Scwing Gmbh run things the way they have been for the next 5 years. We'll see if the influx of cash gets things rolling. Still need an improvement in the world economy. and Todd we all knew, just didn't know the percentage.

Like Todd Jr said. Depending on what is right now a very weak World Economy. Once strong companies are no longer. Remember also. This is very limited and specialized equipment that can run for many many years and can be rebuilt over and over again. So the urgent need for new is not there.

This is not equipment with many uses in the field.

Putz also sold because their cash on hand was very low. Putz was much more diversified then Schwing in Product lines. World Economy is the key. Not many places looking at long term stability right now. Even China who has built hundreds of High Rises theat now are sitting empty. But still building.??? Has to catch up soon.

Well said concreteluvr. We all need to prepare for what will be the new normal.

Here's a thought.  Let's assume the Chinese are using the same economic stategys like Goldmans,  it would be prudent Of putzmester and schwing to sell to them get an influx of cash retool factories and if the same thing happens like in the United States Putzmeister and Schwing owners would be able to buy their own companies back for cents on the dollar, with updated equipment in their plants.  Sell low buy back even lower.  In this economy assets or cash which would you want?