The German company Trumpf has acquired a 72% stake of leading Chinese machine tool maker Jiangsu Jinfangyuan (JFY) to strengthen its position in a fast growing market full of opportunities for foreign investors, said a lead lawyer involved.
¡°The Chinese machinery market has grown very fast in the past 10 years, with annual double-digit growth rates,¡± Ulrike Glueck, the managing partner of CMS, China¡¯s Shanghai office, told China Business Law Journal.
Glueck led the firm¡¯s team advising Trumpf on all aspects of the transaction from the start. Trumpf sales in China reached about €180 million (US$243 million) in the past financial year. JFY generated sales of around€67 million in the past year.
Glueck said that China marked the high-end equipment manufacturing industry as a ¡°strategic emerging industry¡± in its 12th Five Year Plan, with the aim of speeding up innovation and development in this sector.
¡°While the domestic demand for high-end machinery equipment is growing, many domestic companies still have problems in designing and manufacturing advanced machine tools,¡± she said. ¡°This opens opportunities for foreign investors.¡±
The need of many emerging markets for cheap machinery equipment of good quality also helps China gain foreign investment. ¡°In order not to negatively influence their high-end brand, foreign investors may be interested in serving these markets through a second, more low-cost brand with products manufactured in China,¡± Glueck said. She has seen companies from various foreign countries active in China¡¯s machinery market ¨C supplying machinery tools to China, sourcing machinery tools and components from China, and also producing locally in the country.
¡°Traditionally strong in this sector are German, Japanese and US companies, however also companies from other European countries, such as Italy,¡± she said. ¡°On the other hand, in the past years domestic Chinese machine tool manufacturers also have grown very fast and expanded globally.
¡°Examples are acquisitions by Chinese machinery equipment manufacturers of companies in Germany, France and other European countries.¡±
