ChemChina Looks Abroad Again

Having agreed to buy Italian tire maker Pirelli in March 2015, state-owned ChemChina is now buying KraussMaffei Group, a German producer of machinery used in the plastics and rubber industries. ChemChina will pay $1 billion to buy the firm from Onex, a Canadian private equity investor that acquired it in 2012. In justifying the deal, ChemChina says KraussMaffei products will enjoy better sales in China as its subsidiary. The Chinese giant notes that it already has a machinery unit, China National Chemical Equipment Corp., with which KraussMaffei will cooperate. But ChemChina promises to leave the German company’s headquarters in Munich and to retain current managers and employees. Confident about its future, KraussMaffei expects to increase its worldwide headcount in 2016. In 2015, the company notes, it achieved 15% growth in sales.