Sandvik to acquire premium solid round tools company Chuzhou Yongpu Carbide Tools Co., Ltd
Sandvik has agreed to acquire 67% of Chuzhou Yongpu Carbide Tools Co., Ltd, a premium solid round tools manufacturer based in China, with plans to purchase the remaining shares in three years. This acquisition aligns with Sandvik's strategy to enhance its market share in solid round tools and expand within the Asian market. Chuzhou Yongpu, generating approximately SEK 400 million in revenue, will continue to operate independently. The deal is expected to close in Q3 2021, with an initial neutral impact on Sandvik's earnings per share.
- Acquisition of Chuzhou Yongpu strengthens market share in solid round tools.
- Expected geographical expansion for cutting tools in the Asian market.
- Chuzhou Yongpu's existing brand and customer focus align well with Sandvik's strategy.
- Chuzhou Yongpu's EBIT margin is slightly dilutive to Sandvik Manufacturing and Machining Solutions.
SANDVIKEN, Sweden, July 28, 2021 /PRNewswire/ -- Sandvik has signed an agreement to acquire
"The acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd is part of our strategy for our machining solutions business to increase our market share and take a leading position in solid round tools, and at the same time expand further in the Asian market. We are looking forward to welcoming Chuzhou Yongpu Carbide Tools Co., Ltd to the Sandvik Group", says Stefan Widing, President and CEO of Sandvik.
Chuzhou Yongpu Carbide Tools Co., Ltd will continue to operate under its own brand and focus on developing its offer and market share with the ambition to become a leading premium provider of solid round tools in China. The combined expertise and footprint of Sandvik Coromant and Chuzhou Yongpu Carbide Tools Co., Ltd will drive further geographical expansion in the region, particularly for cutting tools.
"We have long-term strategic commitment to strengthen and develop our business. China is a fast-growing market for solid round tools, and the acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd will further strengthen our presence and enhance our offer to customers in this important region. With its premium position and strong customer focus, Chuzhou Yongpu Carbide Tools Co., Ltd is a great fit for Sandvik Machining Solutions", says Nadine Crauwels, President of Sandvik Machining Solutions.
Chuzhou Yongpu Carbide Tools Co., Ltd is headquartered in Chuzhou, China, and has around 500 employees. It had revenues of approximately SEK 400 million for the twelve month period Q2 2020 to Q1 2021, an EBIT margin slightly dilutive to Sandvik Manufacturing and Machining Solutions. Impact on earnings per share will initially be neutral.
The transaction is expected to close during the third quarter of 2021.
For further information, contact Louise Tjeder, VP Investor relations, phone: +46 (0) 70782 6374 or Johannes Hellström, Press and Media Relations Manager, phone: +46 (0) 70721 1008.
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SOURCE Sandvik
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