China National Chemical Corporation (ChemChina) has agreed to acquire KraussMaffei Group from Onex Corporation for a cash enterprise value of €925million.
According to KraussMaffei, the transaction is subject to closing conditions including customary regulatory approvals. The transaction is expected to accelerate the growth of the company considerably in light of potential business synergies. ChemChina together with GUOXIN International Investment Corporation and AGIC Capital will make this acquisition.
ChemChina is a strategic and long-term oriented investor “With ChemChina, we have found a strategic and long-term oriented investor who has been interested in our Company for many years,” said Frank Stieler, CEO of the KraussMaffei Group. The KraussMaffei Group will continue to operate in its current corporate structure.
“We are strengthening our company with one of the leading global engineering groups, encompassing a 178-year corporate history. In doing so, we expect that KraussMaffei Group will maintain its identity and independence,” said Jianxin Ren, Chairman of ChemChina.
“We are investing in the Company’s strong management team and its technological expertise, which we believe will benefit our Chinese subsidiaries and position the chemical machinery business of ChemChina, which build and sell equipment for the rubber and chemical industry, to become a pioneer in achieving the ‘Made in China 2025’ program which aims to enhance Chinese industry. The growth potential of the KraussMaffei Group is tremendous, especially through improved access to the Chinese market, which we can make possible. We expect trends in the automotive industry towards advanced manufacturing and lightweight components will provide a huge development opportunity for the high-end plastic injection moulding industry. Together, ChemChina and the KraussMaffei Group will be well positioned for future growth,” added Ren.
“Following Onex’s acquisition in late 2012 KraussMaffei Group has achieved strong growth and had a very successful year in 2015. As part of ChemChina, we expect to considerably accelerate our growth strategy, especially in China and Asia, and to further strengthen the Company in Germany and Europe,” emphasised Stieler.
In China, the Company is expected to benefit in particular from the trend towards higher quality and sustainability. KraussMaffei explains, the machines and systems of its three brands – KraussMaffei, KraussMaffei Berstorff and Netstal – are especially suited to meet more challenging customer requirements. As a result of the transaction, the KraussMaffei Group will be able to accelerate its planned expansion in China.
“Accelerated growth will have a sustained positive impact for the Company globally. Our Company has a strong foundation and we will continue to build on our strengths, and create new jobs around the world,” said Stieler. “Our brands, KraussMaffei, KraussMaffei Berstorff and Netstal, will always stand for highest quality and sustainability.”
The KraussMaffei Group’s headquarters will remain in Munich and the operating and corporate responsibility for the Company will stay in Europe. This applies in particular to production, technology, patents as well as research and development. The KraussMaffei Group says it will continue to operate as a German company with a Supervisory Board based on co-determination. All existing collective agreements and location-based commitments will remain unchanged.
At present, the Company has approximately 4,500 employees globally, of which 2,800 are based in Germany. The Company intends to increase its workforce in 2016, including in Germany. Works council and IG Metall welcome the change in ownership The employee representatives and IG Metall welcome the planned change in ownership. “We consider the transaction as a significant opportunity for the KraussMaffei Group and its employees. We are confident that through further growth the existing jobs in Germany and Europe will be secured and expanded,” commented Peter Krahl, Chairman of the Works Council of the KraussMaffei Group.
IG Metall is also supportive of the change in ownership. “This change comes at the right time for the Company and offers a good perspective for further growth,” said Horst Lischka, Company Representative of IG Metall responsible for Munich and member of the Chairman’s Committee of the Supervisory Board of the KraussMaffei Group. “I am pleased that the German principle of co-determination is also enjoying greater appreciation abroad as a foundation for sustainable corporate success,” he added.
KraussMaffei explains that ChinaChem operates internationally and has a global expansion strategy, having acquired or invested in companies in Italy, France, Norway, the UK and Singapore in the last few years with the most recent acquisition being the high-end tire manufacturer Pirelli. When it comes to equity investments, ChemChina focuses on exceptional management expertise as well as the quality and value of the acquired companies. Following Onex’s acquisition in 2012 KraussMaffei Group says it has demonstrated sustained improvement in its financial and operational performance. In 2014, the Company generated revenues of approximately €1.1 billion and is expected to achieve year-on-year revenue growth of approximately 10 percent for 2015.
“We thank Onex for constructively supporting our Company over the last three years, which has allowed us to achieve record performance in 2015 and has positioned the Company well for the future,” commented Stieler. “Over the past several years we’ve worked closely with KraussMaffei Group’s management team to improve the performance of the company, further strengthening its leadership position in the global plastic and rubber processing industries,” said David Mansell, a Managing Director of Onex. “We’d like to thank all of KraussMaffei Group’s employees and management for their dedication and hard work,” added Mansell.