New direction for XCMG
Xuzhou Construction Machinery Group Co acquires and merges with its controlling shareholder XCMG Co
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XCMG sits in third place worldwide for sales of construction machinery
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Hailed as a model of reform and innovation for state-owned enterprises to embrace the capital market, the China Securities Regulatory Commission (CSRC) have approved the largest merger transaction in China’s equipment manufacturing industry.
The transaction has seen Xuzhou Construction Machinery Group Co. (XCMG Machinery) acquire and merge with its controlling shareholder XCMG Co at a price of 38.686 billion Yuan ($8.9 billion NZD).
To formalise the acquisition, XCMG Machinery issued shares to all XCMG Co shareholders to take a 100% equity stake. According to reports, XCMG, with sales of $15.1 billion USD, sits in third place behind Caterpillar ($24.8 billion USD) and Komatsu ($19.9 billion USD).
It produces a wide range of trucks and construction equipment for both the civilian and military markets and outlined its vision for the new direction of the company by reaching the industry ‘Mount Everest’.
With the transaction completed, assets including all manufactured machinery have been injected into XCMG Machinery, with the company saying it will take a more market-orientated approach to its business operations and focus more on construction machinery.
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