Issue: Jul 2017


FEUER powertrain and Chinese Haowu-Group Agree Strategic Partnership and Joint Venture in China



by Alan Tran

The transaction creates a globally leading manufacturer of crankshafts with a production footprint in Europe, Asia and the US.

 

FEUER powertrain, a leading OEM-independent crankshaft manufacturer in Europe has entered into a comprehensive strategic partnership with Chinese Haowu-Group. Haowu is the parent company of Neijiang Jinhong Crankshaft, a leading crankshaft manufacturer in China and is also active in other areas of the automotive industry.

 

Under the newly formed partnership, FEUER powertrain and Haowu-Group will pursue the implementation of a Joint Venture in China, which shall bundle the business of both partners for high-end crankshafts in Asia and shall lay the foundation for further growth in the Asian market. Main focus of the cooperation in the Joint Venture shall be especially Western OEM's. Thereby, the contribution of FEUER powertrain will in particular be its strong technological know-how and excellent access to European and US premium OEM's, while the contribution of Haowu-Group will especially be its excellent access to the Chinese and other Asian markets and its experience in building and operating efficient production plants in China.

 

Furthermore, as part of the overall transaction, Haowu becomes a 50% shareholder of FEUER powertrain - which underpins the envisaged long-term perspective of the partnership and also ensures the full alignment of interest among the partners.

 

In addition, the parties have granted each other options, which allow to potentially buy or sell further ownership stakes in the future. It was agreed not to disclose all transaction details.

 

Leadership of FEUER powertrain will continue to be in the hands of CEO Bernd Gulden and continuity on the management level is being ensured. Moreover, in connection with the transaction, Bernd Gulden has also given a long-term commitment to remain a significant shareholder of FEUER powertrain.

 

Together with its new strong partner and against the background of the excellent global presence created by the team-up, FEUER powertrain expects an accelerated continuation of its growth across all locations, which will also be to the benefit of its employees.

 

Dieter Feuer, founder of FEUER powertrain comments: "I am delighted that with Haowu-Group we have found an excellent strategic partner, who will support the further growth of FEUER powertrain."

 

Mr. Guangtong Yan, General Manager and Vice Chairman of Haowu-Group, comments: "The excellent market position of FEUER powertrain in Europe and the US as well as the outstanding technological know-how in combination with the strength of Haowu-Group in Asia will create a truly global player in the crankshaft industry. We are looking forward to the cooperation with the FEUER powertrain team and are convinced that particularly the global clients of both partners will benefit from the possibility, to be supplied by one group in all parts of the world."

 

Bernd Gulden, CEO of FEUER powertrain adds: "Following our intensive dialogue throughout the transaction process that was always built on high professionalism and trust, I am now very much looking forward to the operating cooperation with the whole Haowu team. This step is a key for us, to properly unlock and address the growth market China".

 

In connection with the transaction, Argonas Corporate Finance Advisors acted as exclusive M&A advisor to FEUER powertrain and its shareholders. Heuking Kühn Lüer Wojtek, Frankfurt, acted as legal advisors on the transaction.

 

About FEUER powertrain

 

FEUER powertrain Group is a leading, OEM independent manufacturer of casted and forged crankshafts for passenger car, industry motor, ATV and agricultural machinery applications. FEUER powertrain was established in 2002 in Nordhausen, Thuringia (Germany) and today operates production plants in Germany and the US as well as an assembly plant in China, with a combined annual capacity of up to 2.5m crankshafts.

 

About Haowu-Group

 

Haowu-Group, with Tianjin Haowu Electromechanical Automobile Trading Co., Ltd ("Tianjin Haowu") as the group's parent, was established in 2000, initially as large-scale comprehensive automobile dealer, with businesses today covering automotive components manufacture, domestic passenger cars management, imported vehicles sales, used cars services, end-of-life vehicle dismantling, international trade and warehouse logistics, financial leasing and commercial property related to auto industry development. Tianjin Haowu generates annual revenues of about 14bn RMB (about EUR 2bn) and employs more than 4,500 people across more than 120 group companies.

 

Furthermore, since 2011 Tianjin Haowu is the controlling shareholder of Sichuan Haowu Electromechanical Co., Ltd ("Sichuan Haowu"), which is an A-listed company whose main business is the production and sale of crankshafts via its operating subsidiary Neijiang Jinhong Crankshafts. Sichuan Haowu will be the Joint Venture partner in the planned Joint Venture with FEUER powertrain.

 

Haowu-Group is part of the Tewoo Group, a Fortune 500 company and one of China's largest material handling and commodities trading Groups. Tewoo Group is a state-owned enterprise generating annual revenues of about 500bn RMB (about EUR 70bn) and employing about 19,000 people across more than 200 group companies.

 

About Argonas Corporate Finance

 

Argonas Corporate Finance Advisors, headquartered in Berlin (Germany), is a specialized, independent advisory firm that supports particularly mid-market companies and their shareholders as well as private equity firms and family offices on transactions and projects relating to M&A and financing. The team combines complementary experience in the areas financing, M&A and private equity which has been built up over many years with various roles at leading banks, advisory firms and investment firms.

 

About Heuking Kühn Lüer Wojtek

 

About 350 specialized lawyers, tax advisors, and civil law notaries at Heuking Kühn Lüer Wojtek provide legal advice across ten offices. According to the latest JUVE revenue ranking October 2016, Heuking Kühn Lüer Wojtek is one of the top ten law firms in Germany. National and international clients include medium-sized and large companies from manufacturing, trade, and the service industries as well as associations, public corporations, and discerning private clients.

 



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