The deal, announced at the Conexpo show in Las Vegas this week, includes HSW鈥檚 distribution subsidiary, Dressta, but not HSW鈥檚 military manufacturing business.
LiuGong is one of the largest wheel loader manufacturersin the world with a 15% global market share and is ranked as the15thlargest construction equipment manufacturer in the world in 2010.聽聽LiuGonghas 12 product lines, including wheel loaders, bulldozers, backhoes, skid steers, forklifts, graders, excavators, rollers, truck mounted and crawler cranes, and pavers. Last year, LiuGong produced and sold more than 56,500 machines worldwide with production from16 manufacturing facilitiesinside and outside of China.
Established in 1937, HSW produces crawler dozers at its plant in the Podkarpackie province in southwestern Poland. HSW also makes wheel loaders, sideboom pipe layers and machines customised for landfill applicationsand logging operations.聽
Dressta is the exclusive marketing arm of HSW equipment with offices around the world.聽 Machines are sold under the HSW brand in parts of Eastern Europe, but are sold under the Dressta brand throughout the rest of the world.
HSW stock is primarily government-held, with Poland鈥檚 State Treasury as the largest stockholder.
LiuGong vice chairman and president Zeng Guang鈥檃n described the acquisition as 鈥渁nother bold step in LiuGong鈥檚 global growth strategy鈥�.
He said: 鈥淲e are pleased to partner in this agreement with HSW as this provides an excellent opportunity for LiuGong to acquire manufacturing capacity in Europe, as well as technology that will supplement our machine lines.
鈥淭his acquisition helps us continue success with our five year strategy to become a top 10 construction equipment manufacturer.鈥澛�
With HSW Dressta, LiuGong gets a strong bulldozer line complimentary to LiuGong鈥檚 product mix, said LiuGong R&D vice president David Beatenbough.
鈥淲ith HSW Dressta, LiuGong acquires proven technology within the bulldozer segment,鈥� said Mr Beatenbough, adding that LiuGong will acquire all the patents for technology and designs,for complete machines as well as component technology, including undercarriages and driveline components such as axles,transmissions and torque converters.
聽鈥淗SW is one of only seven manufacturers in the world with a full line of bulldozers. And the machines have a long design history that reaches back to International Harvester, which was an early developer of track-type undercarriages that led to true construction machinery as we know it today. LiuGong will benefit from HSW鈥檚 world class engineering expertise and we鈥檒l gain access to some large, high horsepower machines and advanced driveline component technology,鈥� Mr Beatenbough added.
鈥淲e鈥檒l quickly be sending teams back and forth between Poland and China so we鈥檒l be able to share innovations. We will continue production in Europe of HSW鈥檚 current product range, and supplement this with production in Poland of some of LiuGong鈥檚 core models to serve the European markets,鈥� he added.
LiuGong also expects to benefit from the reach of HSW Dressta鈥檚 distributor and dealer network.
Financial arrangements for the acquisition will be disclosed when the final agreement is signed, which is expected by the end of the June.聽
LiuGong has already has one overseas factory, having opened a wheel loader factory in India two years ago.
LiuGong made profits of US$280m in 2010 on total sales of $2.32bn. Profits were up 80% on 2009 and sales revenue was up 51%.
In the past five years, LiuGong has seen nearly 30%average annual revenue growth as total company revenues have steadily climbed from $700m in 2006.
LiuGong sold 56,424 machine units in 2010, up 45%from the 38,920 sold units in 2009. Of these, 50,894 went to the Chinese domestic market and 5,530 units were sold overseas. Total 2010 production was 62,000 machines. In 2006 it sold 22,194 units.
LiuGong is headquartered in Liuzhou, China and is publicly traded on the Shenzhen Stock Exchange. It has a rapidly-growing, worldwide network of 117 dealers across six continents in more than 77 countries with more than 883 outlets. It also has nine subsidiary locations around the globe.
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