Sumitomo Heavy Industries has paid ?77.6m ($118 million) for Demag Plastics Machinery, in a deal that closed today linking the two injection press makers.
The merger “creates the first globally operating company” in the injection press industry, the companies said in a news release 3 March announcing the finalised deal. DPG estimated the worldwide market share of the merged companies stood at around 12%.
The deal links Japan’s largest manufacturer of injection moulding machines with DPG, a global manufacturer with plants in Germany, China and India. The combined company has total sales of ?700m, ($900m) when adjusting for changes in the dollar/euro relationship. Sumitomo has press factories in Japan, China and the United States.
Sumitomo said its 2006 sales of injection moulding machines were more than ?350m euros ($440 million). Current Demag Plastics Group sales are around ?250m ($455 million), the companies said in the release.
The announcement was the first time Sumitomo has disclosed a purchase price for DPG.
Sumitomo Heavy Industries is a large industrial conglomerate founded in 1888 and listed on the Tokyo Stock Exchange.
Demag Plastics Group was sold by Madison Capital Partners, a Chicago investment company that had broken out DPG from its plastics machinery group, which includes Krauss Maffei and Netstal injection presses.
Demag Plastics Group is based in Schwaig. Sumitomo’s Plastics Machinery Division is based in Chiba City, Japan.
Klaus Erkes, DPG’s president and chief executive officer, said the company will be a strong global player.
He said in the news release: “It’s mandatory that one should be able to follow one’s customers to sites all-the-world over. And a certain critical mass is needed to succeed in doing so.”
Demag and Sumitomo will offer all-electric, hydraulic and hybrid injection moulding machines on a common platform, plus total integrated systems including automation. The Demag name will continue, the companies said.
“Our joint strategic work has long begun, because we are having great plans,” said Sumitomo Chief Katsuhiko Taniguichi, in the statement. “We will be integrating our companies wherever this makes sense and allow each one of us to develop its strengths.”
Taniguichi said Sumitomo and DPG “will be acting on an equal-eye level and as partners.”
Company officials were not immediately available for additional comment.
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