LiuGong completes HSW deal
First publishedon www.AggBusiness.com
Chinese construction equipment manufacturer LiuGong Machinery Corporation has finalised its first overseas acquisition by buying a European company.
The agreement to acquire HSW (Huta Stalowa Wola) and its distribution subsidiary Dressta was signed by both companies’ executives in the Polish capital Warsaw with celebration ceremonies following at the Baranów Sandomierski Castle in Baranów Sandomierski.
David Beatenbough, currently vice president of Research and Development for LiuGong, has been named chairman of the board of the new entity, LiuGong Machinery (Poland). The transaction is LiuGong’s first outright acquisition outside its domestic market.
HSW produces bulldozers and other crawler machines, while Liugong is ranked as the largest wheel loader manufacturer in the world, and is also said to be among the world’s fastest growing CE companies. It sold 75,000 machines in 2011 and has posted an average of 40% annual revenue growth for the past six years running in overseas markets. It is ranked among the world’s top 20 machine manufacturers, and wants to be in the top ten 2015.
“I’m pleased to be a part of this historic occasion bringing two great companies, and two great brands together,” said Zeng Guang’an, vice chairman and president of Guangxi LiuGong Company.
“This deal further solidifies the strong ties between our two countries, as Poland and China are long term trading partners and we have more than 60 years of excellent relations. This agreement signals a new era of expansion for both LiuGong and HSW.”
HSW chairman Krzysztof Trofiniak said the new partnership is the right move for both companies, leveraging Chinese efficiency and European technology.
Beatenbough said: “Our gaining and retaining the technical knowledge and skills of the HSW employees was important to us in this agreement. It is still important for us to remain competitive in our markets, and this agreement lets us do that.”
In the transaction, LiuGong obtains core technologies that will help it advance some of its product designs; supplements LiuGong’s already expansive product lines; provides a manufacturing and logistic footprint in Europe; and expands LiuGong’s penetration into markets and products segments.
LiuGong already offers a full line of machines to world markets, including wheel loaders, bulldozers, skid steers, forklifts, motor graders, excavators, rollers, drilling machines, truck mounted and crawler cranes, pavers, cold planners, concrete equipment and mining dump trucks.
HSW, established in 1937, manufactures the crawler dozers at its plant in the Podkarpackie province in south-western Poland, and also produces wheel loaders, loggers, pipe layers, conveyer belt shifters, motor graders and machines customised for landfill applications, also for global markets.
Beatenbough, one of the key architects of the acquisition, said: “We will acquire proven technology within the bulldozer segment, as we will now own all the technology and designs, including undercarriages and driveline components.”
He said LiuGong will benefit from HSW’s experience with large model machines.
LiuGong says it will move rapidly to leverage the combined distribution network to bring the expanded product line to dealers: HSW products to LiuGong dealers, and LiuGong products to HSW/Dressta dealers.