Chi­nese buy­ers eye Ger­man in­dus­trial firm FFT

The Star Malaysia - StarBiz - - Foreign News -

HONG KONG: Chi­nese firms in­clud­ing high­end equip­ment maker Jiangsu Hagong In­tel­li­gent Ro­bot Co plan to bid for Ger­man in­dus­trial com­pany FFT, likely to be val­ued at up to US$712mil, two peo­ple fa­mil­iar with the mat­ter said.

China’s state-owned power com­pany Shanghai Elec­tric and Asian-Euro­pean pri­vate eq­uity firm AGIC Cap­i­tal had also ex­pressed in­ter­est ear­lier in the process, be­ing man­aged by Mor­gan Stan­ley as FFT’s fi­nan­cial ad­viser, the peo­ple said.

FFT, a maker of man­u­fac­tur­ing fa­cil­i­ties for car mak­ers and owned by pri­vate eq­uity in­vestor Aton, is ex­pected to be val­ued at around 8-10 times its ex­pected 2017 core

� earn­ings of about 60mil (US$71.21mil), an­other per­son said.

Chi­nese in­ter­est in FFT comes as the world’s sec­ond-largest econ­omy strives to boost lo­cally-made prod­ucts as part of a broad “Made in China 2025” plan, in 10 sec­tors rang­ing from ro­bot­ics to bio­phar­ma­ceu­ti­cals.

The Chi­nese gov­ern­ment is­sued new guide­lines in Au­gust to sup­port over­seas in­vest­ments in sec­tors such as ad­vanced tech­nol­ogy and high-tech man­u­fac­tur­ing, while re­strict­ing deals in prop­erty and en­ter­tain­ment.

Jiangsu Hagong is among a grow­ing num­ber of Chi­nese firms seek­ing ac­cess to ad­vanced Ger­man in­dus­trial tech­nol­ogy as China pushes to bol­ster its high-end man­u­fac­tur­ing.

A maker of in­dus­trial ro­bots and auto au­to­ma­tion equip­ment, Jiangsu Hagong could be the most se­ri­ous bid­der for FFT, said two of the peo­ple.

All the peo­ple de­clined to be named as the bid­ding plans are not pub­lic. FFT, Jiangsu Hagong, Shanghai Elec­tric and AGIC Cap­i­tal didn’t re­spond to re­quests for com­ment. Mor­gan Stan­ley and Aton de­clined to com­ment.

Chi­nese bid­ders’ pur­suit of FFT comes a year af­ter Shen­zhen-listed Midea launched a US$5bil of­fer for Ger­man ro­bot­ics maker Kuka, in a deal that trig­gered con­cerns that China was gain­ing greater ac­cess to key tech­nolo­gies.

China it­self ex­pressed con­cern in July af­ter Ger­many be­came the first Euro­pean Union coun­try to tighten its rules on for­eign cor­po­rate takeovers, fol­low­ing a se­ries of Chi­nese deals giv­ing ac­cess to Western tech­nol­ogy and ex­per­tise.

The new reg­u­la­tions al­low the Ger­man gov­ern­ment to block takeovers if there’s a risk of crit­i­cal tech­nol­ogy go­ing abroad.

How­ever, sev­eral Ger­man com­pa­nies, in­clud­ing Eisen­mann and Eiss­mann Au­to­mo­tive, were push­ing ahead with talks with po­ten­tial Chi­nese buy­ers, and did not ex­pect po­lit­i­cal in­ter­fer­ence, sep­a­rate sources told Reuters in July.

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