Sany Heavy Weighs Overseas Acquisitions Following $3.3 Billion Share Offer

Sany Heavy Industry Co., China’s biggest maker of construction equipment, plans to make acquisitions and build plants overseas after a Hong Kong share offering that may raise as much as HK$26 billion ($3.3 billion).

The company expects to begin production at a plant in the U.S. by year-end, and it’s also targeting sales in India, Brazil, Indonesia, the Middle East and Africa, Tang Xiuguo, president and co-founder of parent, Sany Group Co., said in an interview in Changsha, Hunan province yesterday. Sany may also work with or buy overseas companies to add technology and customers, he said.

“We have some opportunities and we are in talks on some businesses, including...

mergers and acquisitions,” he said. The company may partner with “some specialized enterprises, including some family businesses, which have very good professional skills and a certain group of clients,” he said, without elaborating.

Sany Group, which also makes port equipment and wind turbines, plans to get as much as 50 percent of revenue from overseas within a decade as it targets new markets and seeks to offset a stronger yuan, Tang said. The company has already opened an industrial park in Germany this year as it challenges Caterpillar Inc. and Komatsu Ltd. overseas.

Sany Heavy, based in Changsha, is offering 1.34 billion shares in Hong Kong at HK$16.13 to HK$19.38 apiece, according to the term sheet, a copy of which was obtained by Bloomberg News. The company plans to begin trading in the city on Oct. 3.

Shanghai Shares

The equipment-maker’s Shanghai listed shares fell 1.2 percent to 14.86 yuan yesterday. The stock has risen 3.1 percent this year, compared with a 13 percent decline for Shanghai’s benchmark index.

The company is pressing ahead with the Hong Kong share sale even after XCMG Construction Machinery Co. scrapped plans for an offering in the city because of tumbling global stock markets. The Hang Seng Index has tumble 16 percent since the end of July.

“Conducting a share sale today can help us expand overseas in a faster, better and smoother way,” Tang said. Sany Heavy may eventually invest in Africa in exchange for resources from the continent, he said.

Tang spoke before Sany announced a new type of concrete pump truck with an 86-meter-long arm, which the company said would be the world’s longest. Sany supplied a similar pump to help cool a reactor at a Japanese nuclear plant crippled by the March 11 earthquake and tsunami.

Source: Bloomberg News