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Shares of Shengbang Seals climbed following the company’s announcement of plans to acquire a controlling stake in the local subsidiary of a German manufacturer known for high-quality auto and industrial parts. This move aims to enhance the company’s sustainable profitability.
The company closed up 3.7% at CNY55.57 (approximately USD7.82) per share on the Shenzhen stock exchange, after climbing as much as 12% earlier in the day.
Shengbang intends to purchase a 60% stake in Wuxi Woco Motor Acoustic System with cash, transforming the acquisition into a joint venture with the German firm. The two parties have reached a preliminary agreement that, pending certain preconditions, will value the target company at around CNY430 million (about USD60.5 million).
Wuxi Woco specializes in manufacturing rubber and plastic interior and exterior automotive components, engine assemblies, and integrated electric drive systems. Last year, it reported a net profit of CNY38 million (approximately USD5.3 million) on revenues of CNY533 million. Its main clients include European and U.S. automakers and their joint ventures in China.
The company’s products mainly serve Chinese automotive manufacturers, spanning fuel vehicle engines, gearboxes, axles, as well as battery packs, motors, and electronic control systems for new energy vehicles, complementing the offerings of Wuxi Woco.
Additionally, the existing overseas sales channels of Wuxi Woco could provide Shengbang with a strategic boost to expand internationally once the deal is finalized.
Woco Franz Josef is a family-owned global enterprise headquartered in Bad Soden-Salmünster, with multiple production facilities and partners across Europe, North America, and Asia. According to its website, the company recorded sales exceeding EUR590 million (roughly USD684 million) last year.
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