PRESS RELEASE
■ Letter of intent signed – agreement to intensify cooperation
■ Demag Cranes initially to take minority interest in Weihua’s crane business; majority interest and industrial management planned for later
■ Demag Cranes and Weihua aim to combine forces to become one of the market leaders in China.
Düsseldorf/Beijing, 21 January 2011. Demag Cranes, one of the world’s leading suppliers of industrial cranes and port technology, and the Weihua Group, one of the major crane manufacturers in China, aim to intensify their cooperation and to conclude a strategic alliance in the crane business. Aloysius Rauen, Chairman of the Board of Demag Cranes AG, and Han Xianbao, Chairman and President of the Weihua Group, have signed a letter of intent to this effect in Beijing. As part of the agreement, Demag Cranes will initially acquire a minority interest in the Weihua Group’s crane business. In light of the winwin situation, the Weihua Group has agreed to grant Demag Cranes the option of participating in the industrial management of the Group by taking a majority stake in the medium term. Both companies have agreed on exclusivity regarding further negotiations. Once forces have been combined, Demag Cranes and Weihua will be one of the leading companies in its industry in China.
The crane business of the Weihua Group includes the manufacture and marketing of industrial cranes, harbour cranes and crane components and it is one of the few suppliers in China with panregional representation. The company’s headquarters is in the province of Henan (Changyuan County) in Central China. The Group, which was founded in 1988, has a workforce of 5,000 employees and generated revenue of RMB 2.5 billion (approximately EUR 270 million) with its crane business in 2009. Chairman and President Han Xianbao and his family have a 100 per cent holding in the Weihua Group. The agreement signed stipulates that Han Xianbao will continue to hold a leading position in the Weihua Group in future.
In connection with the letter of intent signed today, Demag Cranes’ CEO, Aloysius Rauen explains: “Our planned strategic alliance with Weihua is a major step for our company. We will be able to strengthen our position in the dynamically growing Chinese market considerably. The letter of intent signed today also underscores Demag Cranes’ resolve, as communicated in the context of our standalone strategy, to foster its position in the growth markets also through acquisitions and to contribute actively to the consolidation process in our industry.”
Han Xianbao, Chairman and President of the Weihua Group, states: “Demag Cranes is one of the world’s leading suppliers of industrial cranes and port technology and Weihua Group is the largest manufacturer of industrial cranes in China. Our company has grown significantly in the crane sector in the past few years and, being one of the leading manufacturers in China, has enormous further potential especially in steel production, railway industry, hydraulic engineering as well as port and terminal fields of application. The planned cooperation with Demag Cranes is an excellent opportunity for Weihua to use and develop new products together and to tap into international markets, where Demag Cranes is well positioned with its worldwide renowned Demag and Gottwald brand names, thus achieving a win-win situation.”
About Demag Cranes
Demag Cranes AG is one of the world’s leading providers of industrial cranes, crane components, harbour cranes and terminal automation technology. Services, in particular maintenance and refurbishment services, are another key element of the Group’s business activities. The Group is divided into the business segments Industrial Cranes, Port Technology and Services and has strong and well-established Demag and Gottwald brands. Demag Cranes sees its core competence in the development and construction of technically sophisticated cranes and hoists as well as automated transport and logistics systems in ports and terminals, the provision of services for these products and the manufacture of high-quality components.
As a global supplier, Demag Cranes manufactures in 16 countries on five continents and operates a worldwide sales and service network that is present in over 60 countries through its subsidiaries such as Demag Cranes & Components GmbH, Gottwald Port Technology GmbH, agencies and a joint venture. In financial year 2009/2010, the Group, with its 5,711 employees, generated revenue of EUR 931.3 million. Since the end of June 2006, the Demag Cranes share (WKN: DCAG01) has been listed in the Prime Standard of the Frankfurt Stock Exchange and is traded on various indices including the MDAX®.
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Conditions for forward-looking statements
This press release contains forward-looking statements relating to the business, financial performance and earnings of Demag Cranes AG and its subsidiaries and associates. Forward-looking statements are based on current plans, estimates, projections and expectations and are therefore subject to risks and uncertainties, most of which are difficult to estimate and which in general are beyond the control of Demag Cranes AG. Consequently, actual developments as well as actual earnings and performance may differ materially from those which are explicitly or implicitly assumed in the forward-looking statements. Demag Cranes AG does not intend or accept any obligation to publish updates of these forward-looking statements.
This press release contains forward-looking statements relating to the business, financial performance and earnings of Demag Cranes AG and its subsidiaries and associates. Forward-looking statements are based on current plans, estimates, projections and expectations and are therefore subject to risks and uncertainties, most of which are difficult to estimate and which in general are beyond the control of Demag Cranes AG. Consequently, actual developments as well as actual earnings and performance may differ materially from those which are explicitly or implicitly assumed in the forward-looking statements. Demag Cranes AG does not intend or accept any obligation to publish updates of these forward-looking statements.
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