FRANKFURT, Oct 5 (Reuters) - State-owned Chinese machinery group China National Machinery Industry Corporation (Sinomach) has placed a bid for German rival MAG Group, in a sign that Chinese appetite for European knowhow remains high, two people close to the transaction said on Friday.
Japan’s Komatsu and two private equity investors also handed in offers for the European operations of MAG, while roughly seven bidders have emerged for MAG’s American business, the sources said.
A spokesman for MAG Group said that the company was now in negotiations with potential buyers. “We expect to finalize the talks in the fourth quarter”, he said.
Goldman Sachs has been mandated to look for a buyer for MAG Group, which comprises Europe and MAG Americas. The two units could be sold separately.
The sellers hope for a price tag of more than 500 million euros ($645 million) for the whole company and at least 250 million for the European operations alone.
MAG Group has annual sales of 1 billion euros. Last year, it posted earnings before interest, taxes, depreciation and amortization of 105 million euros. The group employs roughly 3,500 staff.
MAG was built into a global machine tool group by American investor Eng Mo Meidar, who from 2005 scooped up ailing subsidiaries of companies like steel conglomerate ThyssenKrupp and KUKA and restructured them.
In May this year, Eckhard Cordes, a former executive at Daimler and Metro, took the helm as MAG chairman to lead the recovery of the maker of machine tools for the durable-goods industry.
Originally, several bidders from China showed interest, including the likes of Shenyang Machine Tool (SMTCL) , which have now dropped out of the race.
Chinese companies have already this year scooped up a number of German groups to gain access to technology, brands and worldwide distribution, including Sany’s acquisition of machinery group Putzmeister, Hebei Lingyun purchase of car parts maker Kiekert and Shandong Heavy’s investment in fork lift truck maker Kion Group.