ChemChina Chairman Ren Jianxin said in a statement: “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.”
ChemChina claims to be China's largest exporter of rubber machinery.
Mr. Ren said the deal is also an implementation of China's “One Belt One Road” and “international production capacity cooperation” initiatives.
Mr. Stieler said Onex had a “very successful year” in 2015; according to the company, it will report 10 percent sales growth for the year.
He predicted that as part of ChemChina, KM will “considerably accelerate our growth strategy, especially in China and Asia, and to further strengthen the company in Germany and Europe.”
In China, the company will benefit from a trend toward processors buying higher quality and more efficient plastics machinery.
As a result of the transaction, KM will “accelerate its planned expansion in China,” the companies said in the release, adding that the company's operating and corporate responsibility “will stay in Europe.” The company plans to increase its employment in Germany in 2016.
“All existing collective agreements and location-based commitments will remain unchanged,” the company said in the release.
ChemChina is China's largest chemicals group, with sales of 37 billion euros and 140,000 employees. The company ranks 265th on the Fortune 500 list, and No. 9 in global chemicals.
ChemChina's publicly listed subsidiary, Tianhua Institute of Chemical Machinery and Automation, said in a filing that KraussMaffei's business has a certain competitive relationship with its plastics processing technology business — extrusion and reaction molding. Tianhua said ChemChina will follow the non-competition agreement that was previously reached to handle the issue.
Terms of the deal
The cash value of ChemChina's purchase is 925 million euros ($1.01 billion), a 62-percent gain from the 568 million euro ($731 million) deal in 2012 when Onex bought KM from Madison Capital Partners. Onex highlighted KM's improved financial performance in its announcement.
China Reform Holdings Corp. Ltd., an investment firm charged with revamping state-owned enterprises, and leading Asian-European private equity firm AGIC Group, also took shares in the transaction, ChemChina said.
The deal is pending antitrust approval.
In 2011, private equity firm Oncap, part of Onex, bought Davis-Standard L.L.C., a maker of extruders, blow molding machines and related equipment. Last year it added Gloucester Engineering Co. to the Davis-Standard portfolio.
This report appeared on the website of Plastics News, a Detroit-based sister publication of Tire Business.