China National Chemical Corporation (ChemChina) is seeking to list its subsidiary KraussMaffei, a world leading supplier of machinery and systems for producing and processing plastics and rubber that it acquired in April 2016, on the Shanghai stock exchange in China. To this end, KraussMaffei is to be absorbed by the Qingdao Tianhua Institute of Chemistry Engineering Co. Ltd, which is already listed on the Shanghai stock exchange and a subsidiary of ChemChina, by way of injecting its equity interest into an existing listed company under ChemChina. KraussMaffei’s headquarters will remain in Munich, Germany, and ChemChina will remain as the actual controller of KraussMaffei.
|German jobs will continue to be safeguarded after the listing of KraussMaffei on the Shanghai stock exchange.|
The planned transaction will support KraussMaffei’s further growth. The company has already increased its revenue for fiscal 2016 by 5 percent to EUR1.27 billion Euros and is heading towards crossing the EUR1.3-billion mark in 2017. Further, in 2017, KraussMaffei is expected to generate approximately 350 new jobs globally – the company now has more than 5,000 employees.
The transaction is subject to approvals by relevant bodies and regulators in China. The request for approvals will be reviewed by relevant bodies and regulators and are expected to be received over the next coming months
In addition, three ChemChina sites for the production of tires and rubber will be integrated into the listed entity. "KraussMaffei's business will make up about 85 percent of the listed company", said Frank Stieler, CEO of KraussMaffei. KraussMaffei would continue to expand the international business from Germany as well as drive the Chinese business locally. Through the planned access to the Chinese capital market, KraussMaffei will be able to accelerate its growth in the mid-term.
The planned transaction is the next step in the development of KraussMaffei. “Through the planned transaction we are receiving access to the capital market. Through new financial resources we have the opportunity to continue to develop our company and accelerate our planned growth,” said Frank Stieler, CEO of KraussMaffei.
The employee representatives and IG Metall union reportedly welcome the listing move. “The further improved access to the Chinese market will continue to generate growth through which existing jobs in Germany and Europe will be secured”, said Peter Krahl, Chairman of the works council of KraussMaffei. IG Metall also has a positive view on these developments. “Under the new ownership KraussMaffei is on a clear course. Most recently the 5,000th employee was hired. ChemChina is a reliable partner”, said Horst Lischka, Company Representative of the IG Metall responsible for Munich and member of the Chairman’s Committee of the Supervisory Board of KraussMaffei.
ChemChina remains actual controller of KraussMaffei and will continue to support the future growth of the company. “We have always believed in the growth potential of the company. Through a future listing on the Shanghai stock exchange, the perception of KraussMaffei will significantly increase in the Chinese market. Chinese investors appreciate German industrial workmanship as well as management competency,” said Jianxin Ren, Chairman of ChemChina. The Qingdao Tianhua Institute of Chemistry Engineering Co. Ltd. is currently listed on the Shanghai stock exchange under the ticker symbol 600579.SS. Trading of Qingdao Tianhua Institute of Chemistry Engineering Co. Ltd. shares has been halted for the past five months in accordance with Chinese regulation.