China’s Zoomlion acquires Cifa

Chinese construction equipment manufacturer Changsha Zoomlion Heavy Industry Science & Technology Development Co Ltd (Zoomlion) has announced the acquisition of Italy's Compagnia Italiana Forme Acciaio (Cifa) for € 271 million (US$ 421.9 million).

In a statement the company said the acquisition was made in partnership with US-based investment bank Goldman Sachs and two other investors. Zoomlion will pay € 163 million (US$ 255.5 million) for a 60% stake in the Italian construction machinery maker, while Goldman Sachs, Mandarin Capital Partners and Chinese private-equity firm Hony Capital would hold the remaining 40%, the company said in a statement to the Shenzhen Stock Exchange.

Zoomlion will use € 31.9 million (US$ 50 million) of its own money and borrow € 127.5 million (US$ 200 million) from the Hong Kong branch of Britain's Barclays Bank to fund the purchase of Cifa, which is being sold by Italian private equity company Magenta and eight other shareholders.

Zoomlion expects the acquisition to help it expand sales overseas. Zoomlion's main domestic rival Sany Heavy Industry Co (Sany) said earlier this year it plans to invest more than € 63.8 million (US$ $100 million) in its first plant in the US, as it expands internationally.

Cifa, founded in 1928, is a leading international concrete machinery manufacturer.