China National Chemical Corp agreed to buy German machinery maker KraussMaffei Group from Canada's largest buyout firm in a deal valued at about $1 billion to help the Chinese State-controlled company upgrade its expertise in manufacturing plastics and rubber.
China's biggest chemicals company will make the transaction at an enterprise value of 925 million euros ($1 billion) from Onex Corp and its affiliates, according to a statement on Monday.
ChemChina, as the company is known, will team up with Guoxin International Investment Corp and Henry Cai's AGIC Capital in the deal, which is expected to be completed during the first half of the year, according to the statement.
The purchase adds to ChemChina's emergence as one of the country's most ambitious deal-makers after buying or investing in assets in Italy, France, Norway, the United Kingdom and Singapore in the past few years, including tiremaker Pirelli & C SpA.
KraussMaffei, which generated revenue of about 1.1 billion euros in 2014, supplies machines that process and produce plastics and rubber, with customers in industries ranging from automotive to consumer goods and pharmaceuticals. It has about 4,500 employees globally, of which 2,800 are based in Germany.
ChemChina said after the deal, China's biggest acquisition in Germany, the company will retain KraussMaffei's management and employees, with the headquarters remaining in Munich and operations staying in Europe.
Buying 178-years-old KraussMaffei will bolster ChemChina's chemical machinery business and fits in the Chinese government's broader plans to upgrade its manufacturing sector over the next decade, ChemChina Chairman Ren Jianxin said in the statement.
Canada's Onex, which invested 276 million euros in KraussMaffei in 2012, will receive proceeds of about 670 million euros, according to the buyout firm in a separate statement.
