Business, Earthmoving News

XCMG shifts focus to construction

New direction comes after major merger transaction involving Chinese giant

The largest merger transaction in China’s equipment manufacturing industry has been approved by the China Securities Regulatory Commission (CSRC).

The transaction has seen Xuzhou Construction Machinery Group Co. (XCMG Machinery) acquire and merge with its controlling shareholder XCMG Co at a price of 38.686 billion Yuan ($8.3 billion AUD).

To formalise the acquisition, XCMG Machinery issued shares to all XCMG Co shareholders in order to absorb the latter and take a 100 per cent equity stake in the company.

With the transaction now completed, all assets including excavation machinery, concrete machinery, mining machinery, tower cranes, and other machinery, have been injected into XCMG Machinery.

Following the acquisition, XCMG Machinery says it will focus “more on construction machinery and key components,” as well as take on a more market-orientated approach to its business operations.

The manufacturer, which produces a range of mini and large excavators, graders, wheel loaders, and rollers, has outlined its vision for the new direction of the company by reaching ‘the industry Mount Everest’.

Since the transaction was announced by XCMG, company stock on the Shenzhen Stock Exchange has grown from 4.89 Yuan ($1.05 AUD) to 5.68 ($1.22).

Along with being the country’s largest transaction within the equipment manufacturing sector, XCMG has also hailed the deal as one which “…is a model of reform and innovation for state-owned enterprises to embrace the capital market.”

In Australia, XCMG has branches in Brisbane, Perth, and Newcastle. For more information, visit: https://www.xcmg.net.au/

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