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Ashurst advises Chinese state-owned AVIC group on the acquisition of German plant builder KHD

26 Nov 2013

Ashurst is advising companies belonging to the Chinese state-owned group AVIC Aviation Industry Corporation of China (AVIC) on the acquisition of German plant builder KHD Humboldt Wedag International AG (KHD). The Chinese group, which already indirectly owns 20 per cent of the shares in KHD and has also secured a further 19.03 per cent by concluding several share purchase agreements subject to a condition precedent, has today submitted a voluntary public takeover offer together with three further bidders from Singapore. The bidders are offering a cash consideration of €6.45 per share, and the valuation of KHD amounts to approximately €320 million. The transaction is the first public takeover of a German listed company by a Chinese state-owned enterprise.

The Ashurst team comprises partner Reinhard Eyring and counsel Martina Rothe (lead) as well as senior associate Dr Fabian von Samson-Himmelstjerna and associate Joanna Wilczynska-Gluch (all Corporate, Frankfurt). They are being supported by Finance partners Dr Tom Beckerhoff (Frankfurt) and Dominic Gregory (Hong Kong) as well as senior associate Dr Philip Cavaillès (Corporate, Frankfurt) and associate Daniel Öhvall (Corporate, Hong Kong).

Commenting on the transaction, head of Ashurst Germany Reinhard Eyring said:

"This is particularly remarkable due to the fact that public takeovers in Gemany have up to now posed problems which have been almost impossible for state-owned companies from China to solve, and we have broken new ground with this transaction. Chinese state-owned enterprises have to meet numerous regulatory requirements which have also in this case greatly complicated the transaction. For example, pursuant to the Securities Acquisition and Takeover Act (WpÜG) a Chinese bidder, being part of a group whose parent company's shares are owned by the Chinese state, has to disclose all Chinese state-owned enterprises in the offer document. The relevant annex can therefore comprise several thousand pages - in our client's case approximately 5,800."

AVIC is a longstanding client of Ashurst. In 2011, the firm advised the Chinese group on the acquisition of a 20 per cent stake in KHD by its subsidiary Max Glory Industries Limited. In 2012, Ashurst's Hong Kong office acted for AVIC on its investment in the Finnish ship design and engineering company, Deltamarin.

AVIC is an aerospace and defense company owned by the Chinese state, ranked 212 in the Fortune Global 500. In the financial year 2012, AVIC generated a consolidated turnover of approximately RMB300.6 billion (approx. €36.6 billion).

Matter Type
M&A: Acquiror's Counsel
Industry
Transport & Logistics
News Category
M&A