Sany Heavy Industry Co. Ltd., a China-based manufacturer of concrete pumps and other heavy equipment, has inked a deal to acquire Germany-based Putzmeister Holding GmbH for an undisclosed sum. Believed to be the largest deal between China and Germany, the acquisition aims to create a global juggernaut for concrete-pumping machinery.
"This merger is a global showcase transaction," said Karl Schlecht, Putzmeister's founder, in a joint statement released on Jan. 27. "Sany is one of the few large Chinese conglomerates which is personally operated by the founder, who is also the majority shareholder."
Putzmeister will retain its brand and management, noted Liang Wengen, chairman and founder of Sany. "With this merger, Putzmeister and Sany will create a new and global market leader for concrete pumps," he said. Sany is listed on the Shanghai Stock Exchange with a market capitalization of about $16.8 billion.
Sales of concrete truck pumps, which are heavily dependent on residential, commercial and public-works construction, have sagged during the downturn. Sources say about 80 units were sold in the U.S. last year, and 120 are forecast for 2012. Prior to the recession, about 800 units were sold.
The combination, expected to close in the first quarter, would increase Sany's already-enormous manufacturing scale at a time when sales are poised to rise. According to sources at both companies, Putzmeister claims about 45% of the international market for concrete truck pumps outside of China. Schwing, also of Germany, is the next-closest competitor, with a share of about 30%. Putzmeister sold about $750 million in goods last year.
Inside China, which is the largest consumer of these machines, Sany has a market share of about 60% and the capacity to produce about 800 units a month. About 6,000 truck pumps were produced worldwide last year, manufacturing sources say.
The deal comes after Sany has invested more than $160 million in factories in Germany and the U.S. "Sany is in a good position to take advantage of this point in time," David Wright, general manager of Sany America Inc.'s concrete pump division, told ENR prior to the announcement at this year's "World of Concrete" show in Las Vegas.
Industry analysts told ENR during the concrete show that China-based XCMG was investing in Schwing. Neither company has confirmed this information.
While Putzmeister receives a well-capitalized successor in the merger, Sany adds German engineering and a new distribution network, both of which could help the company overcome a perception that Chinese equipment is of substandard quality.
"Sany isn't just a Chinese company. It's a global company," Wright said, adding, "We're not going global to be a cheap concrete pump."