Weichai Power Co., Ltd. ("Weichai Power") - China's leading automotive and equipment manufacturing group, is part of Shandong Heavy Industry Group Co., Ltd., and KION Group ("KION") - the world's premier industry Using a forklift manufacturer and a global leader in hydraulic technology, a cooperation agreement was signed in Wiesbaden, Germany today. According to the agreement, Weichai Power becomes the new key investor and strategic partner of KION, both parties will The close cooperation between the handling and hydraulic drive technologies. This cooperation is a milestone deal and it is also the largest direct investment by Chinese companies in Germany.
According to the terms of the agreement, Weichai Power's investment amounted to 738 million euros. Of which, 467 million euros will purchase 25% of KION's shares through capital increase. In addition, 271 million euros will be used to purchase 70% of Kia's hydraulic business. Shares. Kion will use this capital injection to further optimize the capital structure. KKR and Goldman Sachs Capital Partners will continue to maintain their full support for KION and all funds will be retained and used for the investment of KION and no cash will be withdrawn from this transaction. In the event of KION's IPO issuance in the future, Weichai Power shall have the right to increase its stake in KION to 30% and have the right to further increase its shareholding in KION hydraulics.
After the transaction is completed, the hydraulic business will be put into operation as an independent company named Linde Hydraulics, and Kion will continue to retain its strategic stake in the hydraulic company. Linde's hydraulic products will continue to use the Linde Hydraulics trademark. Through the cooperation with Weichai Power, Linde Hydraulics will continue to expand its own scale and better adapt to the ever-changing market environment and increasingly fierce competition. At the same time, by leveraging the complementary products and technologies of the two companies, Linde Hydraulics will be able to take full advantage of the undeveloped market potential and enter new markets, especially in high-growth Asian markets. Linde Hydraulic's business plan includes the relocation of the existing hydraulics business at Nachheim in Aschaffenburg to a new plant in the vicinity, and increased production capacity at other hydraulic production plants.
Tan Xuguang, Chairman of Weichai Power commented: “This cooperation is an important step for us to implement the globalization strategy and strategic plans for expanding new markets and new products business activities in the next five years. Through this investment, we will make full use of it. The strong position of KION helps both parties grasp new growth opportunities and further enhance their respective competitive advantages.KION is a successful company with a long history in operating its own market, with a highly qualified and motivated staff management team, we will ensure that Staff work, production site stability and Linde hydraulic management continuity.â€
Kion’s chief executive Gordon Riske said: “This cooperation is a full recognition of the advantages of the KION International brand and our commitment to serving customers. In addition, the establishment of cooperation with Weichai Power will further strengthen our existing business contacts. It is highly complementary in terms of product, regional market position and technology.The establishment of this strategic partnership has injected an important impetus for the strong growth of KION in the future, especially in China and other Asian markets. Forklift trucks or hydraulics will benefit greatly from Weichai Power's expertise in engine and drive technology."
Johannes Huth, director and head of KKR Europe, and Alexander Dibelius, CEO of Goldman Sachs Group Germany, Austria and Central and Eastern Europe, emphasized: “We welcome Weichai Power to join the ranks of KION shareholders. Since we started working with KION in 2006, , We have been working with KION's team to build KION into a truly global company.This investment is a big step in this direction, and cooperation with Weichai Power will continue to advance KION The growth strategy laid a good foundation."
Weichai Power is fully confident in the KION Group and its management team and believes that they can lead the company to achieve better development. According to the agreement, Weichai Power emphasizes that it will retain all existing collective labor agreements, negotiation agreements, and joint decisions. This is a long-term guarantee for all employees of Linde Hydraulics. In addition, in addition to plans to build a new plant in Aschaffenburg, Linde Hydraulics will also expand its hydraulic business activities in China to better serve the growing needs of customers in China and Asia. All considerations regarding future cooperation in the hydraulics business will be discussed with Kion staff representatives.
Weichai Power and KION also agreed to cooperate in other areas, such as parts and components. In addition, the two parties will give full play to the synergies of sales service network and production capacity, vigorously promote business growth, and enhance the competitiveness of their respective product areas and markets. In terms of material handling, the hydraulic business will enter into a long-term procurement and supply agreement with the Linde Forklift Division of KION.
Weichai Power received strong support from its parent company Shandong Heavy Industry Group. Shandong Heavy Industry Group is a leading Chinese industrial equipment manufacturer specializing in commercial vehicles, construction machinery, power systems, auto parts and yachts.
The transaction is expected to close in the fourth quarter of 2012 and is subject to certain conditions, including third-party approval and waiver, as well as regulatory approval.
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