COMPANY NEWS
Sany buys Putzmeister's 'Made in Germany' brand
Jan 2012
Shani Wallis, Tunneltalk
- China has flexed its economic strength once again and has taken over another of Europe's premier equipment manufacturers. Putzmeister, the leading manufacturer of concrete pumps and shotcreting systems, has agreed to merge with Sany, reportedly China's largest producer of construction machinery and its market leader for concrete pumps. Together with Chinese private equity company CITIC PE Advisors of Hong Kong as a minority shareholder, Sany has achquired 100% of the German manufacturer and its international manufacturing facilities and distribution network.
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- Although both companies agreed not to disclose financial details, the deal is being described as the largest ever Chinese-German transaction and one that will create the global market leader for concrete pumps.
- Under the deal Putzmeister's facility in Aichtal, Germany, becomes Sany's new headquarters for concrete machinery in the world outside China. According to a statement, Putzmeister will continue to operate with a high degree of independence in day-to-day management, with Sany focusing on operations in China where Putzmeister will continue to be the premium brand.
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- In 2003 Putzmeister formed a global strategic partnership with Swiss industrial chemical producer Sika, to develop and market concrete spraying systems that combine Putzmeister's wet mix concrete pumps and Sika's range of shocrete mobile units, nozzles and nozzle booms and incorporating its shotcrete additives with system sales. These systems are marketed as the Sika-PM range of equipment. According to Max Eckstein, manager of the Spain-based shotcreting division of Putzmeister, this week's sale is expected to have no impact on the Sika-PM alliance.
- "For the time being it is too early to say how the product ranges of Sany and Putzmeister will be combined, both inside and outside of China," he told TunnelTalk. "China is an important market for us. For all manufacturing companies China is perhaps the biggest market and one of the most important targets. The news was a complete surprise to us at the operating level, but it could be a real opportunity. The Chinese are strong, they have money, they have markets, and once the sale is ratified over the next months we will know more about how the two companies will operate together. For the moment things will continue as normal," he said.
- A call to Sika in Switzerland confirmed that Sika also anticipates no change in the cooperation agreement with Putzmeister.
- Norbert Scheuch will remain in his position as CEO of Putzmeister within Sany and will join the Sany executive board. The entire proceeds of the transaction will be transferred to the benefit of the Karl Schlecht Gemeinnützige Stiftung (KSG) and the Karl Schlecht Familienstiftung (KSF) which owns 99% and 1% of the company respectively. Morgan Stanley acted as sole financial advisor to Putzmeister for the negotiations.
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Putzmeister's underground equipment range
- A press release from Putzmeister states that its activities and those of Sany are highly complementary geographically. Sany, based in Changsha, China, operates in the largest and fastest-growing market for concrete pumps and other industrial equipment world-wide.The statement reports that Sany's financial strength secures Putzmeister's growth prospects and provides it with a significant competitive advantage. Sany in return adds technologically cutting-edge products and 'Made in Germany' innovations to its portfolio and acquires a strong distribution and service network outside of China.
- In 2011, Putzmeister employed 3,000 people and generated about €570 million (about US$750 million) in revenue.
- Sany Heavy Industry Co., Ltd was founded in 1994 as a privately held company. Its parent company, Sany Group, has grown into a global corporation with about 70,000 employees in more than 150 countries. In January 2009, Sany singed a contract to build a R&D facility, linked to a production facility near Cologne, Germany, with a total investment of €100 million. This was the largest investment by a Chinese company in Europe and both Chinese Prime Minster Wen Jiabao and German Chancellor Angela Merkel attended the signing.
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Karl Schlecht founder of Putzmeister
- Liang Wengen, Chairman and founder of Sany, said: "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 look forward to working with the Putzmeister management, which made this business so successful."
- This merger is the latest in the construction and tunnelling equipment manufacturing industry. In 2008 Changsha Zoomlion acquired 100% of Italy's formwork and concrete handling specialist CIFA for a reported €271 million (about US$425 million at the time) and in 2007 NHI, Northern Heavy Industry Group purchased a majority share in NFM, the French TBM manufacturer, from previous owner Wirth of Germany which has since become a 100% Chinese ownership.
- In the construction and consulting engineering industries too acquisitions and mergers are being negotiated to secure the future of many major names in the business.
- Recent high-profile mergers and takeovers include Halcrow by CH2M Hill; Scott Wilson by URS; Parsons Brinckerhoff by Balfour Beatty; Frontier Kemper by Tutor Perini; Schiavone by Dragados; McNally by Weeks Marine; Wirth by Aker Solutions; and the one that started it all, Lovat by Caterpillar. Looking not only to stabilize current activity but also to react to higher demands from the market place in the size and scope of underground projects being planned and built during the coming decades, more consolidation and partnering for strength and resources within the manufacturing, contracting and engineering divisions of the industry may well materialise.
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Consolidation to capture strength and growth - TunnelTalk, October 2011
China adds CIFA to its European acquisitions - TunnelTalk, September 2008
Halcrow sells out to CH2M HILL - TunnelTalk, September 2011
Tutor Perini buys Frontier Kemper's expertise - TunnelTalk, June 2011
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