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China deal for Robbins 30 Jun 2016

Shani Wallis, TunnelTalk

The Robbins Company of the USA has secured a merger and acquisition deal with Northern Heavy Industries (NHI) Group of China.

An initial report from a senior source at Robbins confirmed: "Yes; NHI is investing in Robbins. However no big changes as far as Robbins is concerned except we will be more financially strong."

NHI announces the deal after its acquisition of NFM Technologies of France in 2007.

A statement from Robbins explains that the agreement is the first step of a three-phase merger process with NHI. In the next phase, anticipated to occur in July 2016, NHI will assume a 61% ownership of the company. Lok Home, President of Robbins, will remain vested in the company and continue in his leadership role. In the final phase, Robbins, NFM and NHI will be merged and with Home anticipated to assume the role of President of the newly formed company. Operations of The Robbins Company, explained the statement, are expected to remain the same.

“This merger puts Robbins in an excellent position to expand our presence in the global TBM market,” said Home. “It will enable us to provide better global service and support to our customers, and will open the door to new opportunities, especially in China. NHI has impressive capabilities. Joining forces with it gives us expanded resources to go after more projects and strengthens our reputation as a world leader in the tunnel boring industry.”

With TBMs of the Robbins and NFM brand in its product portfolio, NHI has strengthened its intent to become a transnational tunnelling machine supplier. The merger with Robbins is expected to provide a competitive edge for the China state-owned NHI and to revive the manufacturing sector in the old industrial base in the northeast region of China where NHI has its huge manufacturing site in Shenyang. NHI products are said to be sold to more than 30 countries worldwide.

The reported acquisition deal is said to support aspirations by NHI to become a public company in three to five years, when its output value is expected to reach 3 billion Yuan (near US$451 million).

NHI manufacturing facility in Shenyang in northeastern China
NHI acquired NFM Technologies in 2007

A report in a Chinese newspaper states that after the merger, NHI plans to integrate the resources and expertise of both companies in a new registered firm at a high-end industrial park in Shenyang, and enhance its presence in the international heavy machinery market. The China newspaper report states that the NHI company employs 10,000 people and is among China's top three heavy machinery manufacturers

This latest deal follows other Chinese acquisitions of Caterpillar Tunneling (Lovat) by LNSS, creating Lovsuns Tunneling Canada Ltd as the North American subsidiary in Toronto; Aker Wirth by CREG; and NFM by NHI; as well as CIFA and Putzmeister formwork and concrete pump manufacturers by Zoomlion and Sany of China respectively, and Australian contractor John Holland from the Leighton Group by China Communications Construction Company (CCCC).

NHI manufacturing facility in Shenyang in northeastern China
NHI manufacturing facility in Shenyang in northeastern China

References

           

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