German machine tool maker Trumpf has taken over China’s engineering firm Jiangsu Jinfangyuan (JFY). The deal is backed by the government and is a rare case of a German family-owned business buying up its Chinese rival.
Trumpf had acquired a majority stake of 72 percent in Chinese mechanical engineering group Jiangsu Jinfangyuan (JFY) in an effort to expand its presence in the world's most important engineering market, the medium-sized, family owned manufacturer announced Wednesday.
Trumpf, which is based in Ditzingen, didn't disclose the prize of the acquisition, but said the deal had been two years in the making and was fully backed by authorities in Beijing.
“It is very unusual that a direct investment like this has been made possible for us especially in mechanical engineering, which the Chinese government has classified as a key sector,” Trumpf Chairwoman Nicola Leibinger-Kammüller told a news conference.
Leibinger-Kammüller also said that the takeover would give Trumpf access to an extremely dynamic segment of the Chinese market, enabling the firm to accompany customers as they grew.
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Jiangsu Jinfangyuan manufactures machine tools for sheet metal processing, and is said to be the Chinese market leader for punching and bending machines. The company, which is based in Yangzhou, was privatized in 1997 and currently employs about 700 people. Sales reached about 70 million euros ($94.7 million) last year.
Trumpf sales stagnated in the past fiscal year of 2012/2013 at about 2.34 billion euros. Net income slumped, however, to 115.6 million euros on increased investments research and development, as well as into staff and sites.