Zoomlion has revealed that it has made a $340mn offer to acquire a 60% stake in Chery.
The Chinese construction equipment manufacturer is looking to profit from Beijing’s drive to promote large-scale rural modernisation, according to a report from Reuters.
The attempted acquisition forms part of Zoomlion’s strategy to “become a leading agricultural machinery enterprise in China”.
The Changsha-based manufacturer is seeking to acquire 1.8bn shares in Chery Holding, one of China’s leading agricultural machinery producers. Last year, Chery’s turnover was “one of the highest among the agricultural machinery enterprises in China”, according to a statement from Zoomlion.
The company’s chairman, Zhan Chunxin, told Reuters that he was open to acquisition opportunities in March of this year. The successful acquisition of Chery would help Zoomlion to compete with other international agricultural machinery manufacturers also making moves in China, such as John Deere and CNH Industrial.
The prospective deal comes amidst news of a fall in demand for construction equipment on the Chinese market. Indeed, Zoomlion issued a profit warning in July 2014. A move into the agricultural sector would go some way towards helping the company diversify its product portfolio and guard against fluctuations in demand.
