Press Release
Weichai Power and KION Group further expand their long-term strategic partnership China Development Bank to provide financing of up to EURO 500 million
Berlin, 26 May 2013 - Weichai Power Co., Ltd. ("Weichai Power"), a leading Chinese automotive and equipment manufacturer and a part of Shandong Heavy Industry Group
("SHIG") and KION Holding 1 GmbH ("KION Group"), a leading global supplier of industrial trucks and related services, take steps to further their long-term strategic
partnership. The partnership, so far the largest direct Chinese investment in Germany, was first announced on 31 August 2012 and implemented on 27 December 2012.
In the presence of Dr. Angela Merkel, the Chancellor of the Federal Republic of Germany, and Li Keqiang, the Prime Minister of the People's Republic of China, representatives of the two partners and of China Development Bank, China's largest outbound investment and financing bank, signed a framework collaboration agreement on Sunday. The three parties agreed that Weichai Power and KION Group will intensify their cooperation through mutually agreeable means and that China Development Bank will provide a full range of financial services including financing of up to EUR 500 million to support the expanded collaboration.
Weichai Power, through its Luxembourg based subsidiary Weichai Power (Luxembourg) Holding S.à.r.l., currently holds a 25% stake in KION Group and has a call option to
increase its shareholding in KION Group to 30% on a fully diluted basis upon the completion of a potential future IPO of KION Group. Weichai Power holds a further option
to acquire an additional 3.3% stake in KION Group from Superlift Holding S.à.r.l., Luxembourg, a company controlled by funds advised or controlled by Goldman Sachs
and KKR.
Tan Xuguang, Chairman and CEO of Weichai Power said: "We are very happy that China Development Bank will provide the financing to support Weichai Power's investment in and collaboration with KION Group. Our equity investment and call options for more shares in KION Group will demonstrate our strong commitment to the common goals of KION Group and Weichai Power. During the past months our strategic partnership has
got off to an encouraging start."
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Gordon Riske, CEO of KION Group, said: "This highly welcome expansion of our long-term strategic partnership will be an additional catalyst for our strategy to
continuously expand our forklift truck business in the growing Asian markets. The partnership with Weichai Power and the spirit the two partners share provide exciting opportunities to leverage on our successful growth strategy. Our teams have already started to implement a close strategic collaboration."
For Weichai Power, venturing into the world's leading forklift and high-end hydraulic fields has brought about clear improvements to the structure of its corporate product division, as well as to its upgrading of enterprise products. In addition, there is greater rationalisation of its corporate global strategic business structure.
For KION Group, the strategic partnership with Weichai Power provides additional access to key Asian growth markets as it will leverage Weichai Power's strong local roots and relationships. KION Group will also have access to a larger supplier base throughout China and Europe.
In 2012, Weichai Power has invested a total of EUR 738 million, including EUR 467 million for the acquisition of a 25% stake in KION Group through a capital increase and
EUR 271 million paid to Linde Material Handling GmbH to acquire its 70% majority stake in Linde Hydraulics. Proceeds from this transaction further strengthened KION Group's capital structure