Sandvik Plans Chinese Supplier Acquisition

Sandvik has reached an agreement with the owners of Shanghai Jianshe Luqiao Machinery Company Ltd. to acquire 80% of the equity interest in Jianshe Luqiao.

The acquisition is expected to be completed within six to nine months, following customary regulatory approvals.

Jianshe Luqiao is supposedly one of the leading companies in the design and manufacture of crushing and screening equipment, including consumables and services, to the Chinese mining and construction industries. The company also has a growing footprint in the international market for competitive and cost-effective crushing and screening solutions.

Jianshe Luqiao has approximately 1,200 employees and sales of approximately SEK1 billion in 2010, of which crushing and screening equipment for mining and construction applications accounts for about 85%. Profitability is reportedly low, and the acquisition will initially have a slight dilutive effect on profit margin and return for Sandvik Mining and Construction.

Jianshe Luqiao has two manufacturing facilities in Shanghai in addition to sales and service distribution networks in most Chinese provinces and in several countries outside China.

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