Northern Heavy Industries (NHI) Group finalized a merger and acquisition deal with the U.S.-based Robbins Company on Tuesday, June 28, in Shenyang, capital of northeast China’s Liaoning Province.
The 1 billion-yuan ($150 million) merger gives NHI 61% of the Robbins’ shares, and is expected to sharpen state-owned NHI’s competitive edge and revive the manufacturing sector in the old industrial base in China’s northeastern rust belt.
“Shenyang has very impressive capability in manufacturing, and Robbins has rich experiences and good reputations in rock tunnel boring machine production. We can also do excellent renovation for shield tunneling machine. I think together we can build a world class enterprise in this area,” said Lok Home, president of Robbins.
This initial agreement is the first step of a three-phase merger process and gives NHI minority interest in The Robbins Company. In the next phase, anticipated to occur in July 2016, NHI will assume 61% ownership of The Robbins Company. Home will remain vested in the company and continue in his leadership role. In the final phase, The Robbins Company, NFM and NHI will be merged, combining their collective resources and expertise. It is anticipated that Lok Home will assume the role of President of the newly formed company. Operations of The Robbins Company 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 very impressive capabilities. Joining forces with them gives us expanded resources to go after more projects and strengthens our reputation as a world leader in the tunnel boring industry.”
After the merger, NHI plans to integrate both companies’ resources and expertise to register a new firm at a high-end industrial park in Shenyang, and enhance its presence in the international heavy machinery market.
“By laying out developing plans in Asia, America and Europe and making a concerted effort together, we will strengthen our competitiveness in the market,” said Yang Tao, General Manager of the Tunneling Machine Company, a subsidiary of NHI.
The merger and acquisition deal is expected to help the NHI become a public company in three to five years, when its output value is expected to reach 3 billion yuan ($451 million U.S.), according to Yang.
NHI, based in Shenyang, NHI employs 10,000 people and is among China’s top three heavy machinery manufacturers. Its products are sold to more than 30 countries worldwide. NHI merged with NFM Technologies of France in 2007 to become a transnational company.
NHI is as a solely state owned enterprise established in 2006 after a merger of SHMG (Shenyang Heavy Machinery Group) and SMMG (Shenyang Mining Machinery Group). After the acquisition of Wirth Group Holding/NFM Technologies, NHI Group became a multinational enterprise.
NHI employs 10,000 people and is among China’s top three heavy machinery manufacturers. Its products are sold to more than 30 countries worldwide. In 2009, NHI was listed among Top 500 Chinese Enterprises.