Sany qualified to take over Putzmeister, expert says

Beijing (CNS) – Sany Heavy Industry (Sany) has the clout to take over the German firm Putzmeister, as the former's scale and profits are far greater than the latter, declared Mei Yuxin, a researcher from the Ministry of Commerce on February 7.

China's construction equipment giant Sany said days ago that its fully-owned subsidiary, Sany German GmbH, will cooperate with China's Citic Funds to purchase Putzmeister at a cost of 360 million euros. Sany German GmbH will pay 324 million euros to own 90 percent of Putzmeister's shares, and Citic Funds will hold the remaining 10 percent.

Industry-watchers have compared this acquisition to the case of Geely purchasing Volvo. Mei doesn't agree and commented that Geely had eyes bigger than its stomach and problems with digestion were inevitable, but Sany's situation is different, as it is developing a sound overseas operation.

Regarding whether both governments will approve the acquisition, Mei said the uncertainty lies with the German government rather than the Chinese. If both companies prove unable to handle the local employment relationships properly, the German government could quite possibly reject the acquisition proposal, said Mei.

It is known that hundreds of German workers from Putzmeister staged a protest against the deal. They are worried about job loss and also registered a complaint that the company failed to update them about the acquisition.

"Although the probability of a rejection is lower than 50 percent, it is still a possibility." admitted Mei.