China: China-based Sany Corp plans to bid for Xugong Group Construction Machinery Co. Ltd, the country's largest construction equipment manufacturer, according to international news agency Reuters.
Xugong is also a target for US private equity firm Carlyle Group, which had a US$375 million bid for 85% of the company accepted last year. This deal is yet to be approved by Chinese industry regulators amid fears that the country was selling state-owed businesses to foreign companies too cheaply.
Privately owned Sany, which controls 66% of Sany Heavy Industry Co. Ltd, is based in Changsha in the Mao Zedong province. Xiang Wenbo, Sany executive president, told Reuters, “Xugong is significantly undervalued by Carlyle. We could pay 30% more or even higher.” Besides, putting a company like Xugong in foreign hands would not be good for the future of the national machinery industry. The government hasn't approved the sale so far, and it shouldn't,” he added.
Xugong holds most of the assets of its state parent Xuzhou Group, China's leading construction equipment manufacturer, which had sales of 17 billion yuan in 2004.