Germany’s MAN group will pay $790 million for a 25% stake in Sinotruk, China’s largest manufacturer of heavy trucks, in a deal that will see the two partners develop new vehicles for emerging export markets.
Sinotruk, based in Shandong province, listed on the Hong Kong stock exchange in November 2007.
MAN, which will become Sinotruk’s second-largest shareholder after parent China National Heavy Duty Truck agreed to pay a 21% premium added to the shares’ 60-day trading average.
Hakan Samuelsson, MAN chief executive, said in a statement, "MAN’s investment in Sinotruk lays the foundation for a joint development of a new heavy truck series tailored to emerging markets."
The new export model will be produced in China and based on MAN technologies that the German company will licence to Sinotruk. China National Heavy Duty Truck, which is controlled by the Shandong provincial government, first licensed MAN technologies in the early 1980s.
Sinotruk sold more than 100,000 heavy trucks last year and claims a leading 20% share of the Chinese truck market. The company exported just 15% of its output to overseas markets.
The Financial Times reported that Sinotruk had a 20% decline in net profit last year to RMB880 million. It also recently warned investors to expect "a substantial reduction in its unaudited consolidated net profit for the six months ending 30 June 2009".