Cargotec to establish a joint venture with Jiangsu Rainbow Heavy Industries Co., Ltd. to strengthen presence in China
CARGOTEC CORPORATION, STOCK EXCHANGE RELEASE, 25 JULY AT 1 PM EEST
Cargotec is planning to establish a joint venture with Jiangsu Rainbow Heavy Industries Co., Ltd. (RHI) in China. The joint venture would provide leading heavy crane solutions globally, expand delivery capacity and grasp growth opportunities in the Chinese and global markets.
RHI is an important long-term supplier for Cargotec manufacturing hatch covers, cargo cranes and other products. The joint venture is planned to focus on ship-to-shore cranes, rubber-tyred gantry cranes, rail mounted gantry cranes and marine specialty cranes. At the start, majority of the production would be sold to global markets, but the share of the Chinese market is estimated to grow strongly.
Cargotec's ownership in the joint venture would be 49 percent and the value of Cargotec's equity investment approximately EUR 30 million.
"This joint venture between Cargotec and RHI would be a strategically important step for Cargotec to expand its presence and offering as well as to improve competitiveness in China. RHI's local presence, knowledge and experience, combined with Cargotec's technology competences, access to global markets and established brand, offer the joint venture an excellent position in the market and enable close cooperation with customers in Asia-Pacific", says Mikael Mäkinen, President and CEO, Cargotec.
"A joint venture with Cargotec would provide us access to global markets and remarkable growth. By joining forces we create a company that is expected to be a significant player in the market with a globally competitive product portfolio", says Wu Jian, Chairman of RHI.
In connection with the establishment of the joint venture Cargotec plans to strengthen its strategic partnership with RHI by becoming an owner in the company. Cargotec will acquire a 49% interest in China Crane Investment Holdings Limited for approximately EUR 50 million. China Crane currently owns 18.75% of the shares of RHI.
China Crane is a Hong Kong based company with the sole purpose of owning the RHI holding. Cargotec will acquire the 49% China Crane stake from Carlyle Asia Growth Partners IV, an investment fund managed by global private equity firm The Carlyle Group.
The transaction is subject to the relevant regulatory approvals, which are expected to be received in the coming 6-8 months. Hence, the joint venture is estimated to start operations in early 2012. This means that the joint venture is not expected to impact Cargotec's financial outlook for 2011.
For further information please contact:
Mikael Mäkinen, President and CEO, tel. +358 20 777 4105
Pekka Vauramo, COO, Deputy to CEO, tel. +358 20 777 4189
Eeva Sipilä, CFO, tel. +358 20 777 4104
Cargotec improves the efficiency of cargo flows on land and at sea - wherever cargo is on the move. Cargotec's daughter brands, Hiab, Kalmar and MacGregor are recognised leaders in cargo and load handling solutions around the world. Cargotec's global network is positioned close to customers and offers extensive services that ensure the continuous, reliable and sustainable performance of equipment. Cargotec's sales totalled EUR 2.6 billion in 2010 and it employs approximately 11,000 people. Cargotec's class B shares are quoted on NASDAQ OMX Helsinki under symbol CGCBV. www.cargotec.com
Jiangsu Rainbow Heavy Industries Company Limited is a fast growing heavy equipment provider in China. The company's main products include marine equipment, lifting equipment, offshore engineering solutions and city parking systems, etc. Rainbow's shares are quoted on the Shenzhen Stock Exchange under symbol 002483:SZ. www.jiangsurhi.com
The Carlyle Group is a global alternative asset manager with $107.6 billion of assets under management committed to 84 funds as of March 31, 2011. Carlyle invests across three segments - corporate private equity, real assets and global market strategies - in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,000 people in 20 countries. www.carlyle.com