All content in this article is based on official and reliable sources, and the specific information is detailed at the end of the article.
preface
XCMG is not only the largest leading enterprise in the construction machinery industry in mainland China, but also a proud symbol of the country's manufacturing strength.
However, there are shocking rumors circulating in the outside world - XCMG was actually "sold cheaply"?
An United States company actually wanted to buy XCMG for $375 million, and XCMG appeared to have been handed over 85% of its shares.
This news was like a thunderbolt on the ground, which instantly caused an uproar in the industry, and people couldn't help but have many questions about the current situation and development of this industry giant.
You must know that in the eyes of experts, XCMG is worth 10 billion yuan.
So, was XCMG really sold cheaply? What has this company, which carries the expectations and dreams of countless Chinese people, developed now?
Was it really sold?
In 2006, Carlyle bought an 85% stake in XCMG Construction Machinery Co., Ltd. for $375 million.
This is the first time a foreign company has bought a large Chinese state-owned company outright, and it is one of the largest private equity investments in China.
Founded in Washington, D.C., United States in 1987, Carlyle is recognized as one of the industry's leading private equity firms, investing in more than 150 companies through its 37 investment funds.
This news quickly caused an uproar in the industry, because XCMG Group's leading position in the field of construction machinery in China is unshakable, and people bluntly say that XCMG Group was sold cheaply.
Source: China Economic Net, 2006-2-22Carlyle acquires shares of XCMG Group The beginning of the era of private equity acquisitions
XCMG's predecessor was Huaxing Iron Factory, which was established in 1943, and in just ten years, with the support of the state and its own unremitting efforts, it has grown into a construction machinery giant that occupies a high influence in the world.
In 1996, XCMG was listed on the Shenzhen Stock Exchange, with gratifying results, with a turnover of more than 1 billion yuan and a net profit of up to 100 million yuan, demonstrating its strong development momentum and becoming the focus of attention.
Reference source: Xuzhou released 2021-5-15 among the top three in the world! What does XCMG rely on?
Everyone has high hopes for them to produce even better results.
However, the good times did not last long, and in 2005, XCMG encountered an unprecedented development bottleneck.
Despite the huge investment, turnover growth has stagnated, and debt pressures and other problems have followed.
Under the pressure of many parties, XCMG had to embark on the road of reorganization, in the eyes of the outside world, XCMG Group, which is in full swing, suddenly released the news of reorganization, which shocked the entire industry.
According to the valuation of XCMG by professionals, it is about 10 billion, and 85% of the shares are also as high as 8.5 billion.
In the face of XCMG's predicament, professional appraisal agencies gave a valuation of up to 10 billion yuan, of which 85% of the equity value is close to 8.5 billion yuan.
In contrast, Carlyle's purchase price of US$375 million (about 3 billion yuan) naturally aroused widespread controversy and regret, and the theory of "cheap sale" was very loud.
At this time, Xiang Wenbo suddenly jumped out, and he emphasized in 46 articles on his blog that XCMG was not an ordinary cheap sale, but a big sale.
His words sparked widespread public discussion about the underestimation of XCMG.
Reference source: Phoenix.com2012-10-31Xiang Wenbo: I will do something similar to Carlyle's acquisition of XCMG
After in-depth understanding, people gradually understood that XCMG was indeed burdened with a heavy debt burden at that time and urgently needed capital injection to solve the urgent need.
However, in the trade-off between valuation and actual investment, XCMG clearly made a difficult choice.
At the critical moment when XCMG is facing a predicament, the outside world is questioning its value, is this once glorious construction machinery giant really only worth 375 million US dollars?
Where is the future headed?
In fact, the Carlyle Group's acquisition did not fully take over XCMG as the outside world thought.
In the agreement signed by the two parties, XCMG cleverly set up a series of restrictive clauses, which act as a line of defense to ensure the company's independence and development direction after the acquisition.
These terms not only protect the core interests of XCMG, but also reflect XCMG's wisdom and strategy.
More importantly, this acquisition is not a simple capital injection and equity change, but carries a more far-reaching meaning.
According to the requirements and expectations of the government, the Carlyle Group not only needs to complete the acquisition of equity, but more importantly, it needs to bring new projects, advanced technology and management experience to XCMG.
Through the cooperation with Carlyle, XCMG has not only obtained the necessary financial support, but more importantly, has gained new impetus for future development.
Such cooperation has undoubtedly laid a solid foundation for the future development of XCMG Group, and also made people full of expectations for it again.
Since 2010, XCMG has successively acquired Netherlands AMAC company, Germany FT company in 2011, and Schweiying company, a global leader in concrete machinery Germany 2012.
Source: Observer Network 2012-07-13XCMG European Technical Headquarters settled in Germany
At this moment, XCMG has really stepped onto the international stage, especially in Europe, which can be regarded as opening a new door.
Wang Min, the head of XCMG, together with these international partners, will jointly reshape the global concrete machinery industry pattern and promote XCMG to realize the ambition and dream of becoming a world-class construction machinery enterprise from China's first.
The two "giants" of the construction machinery industry are strong and strong, not only in the industrial cooperation to a new level, but also constructive significance for Sino-German friendship.
In 2022, XCMG Machinery has made another big move, issuing shares to absorb and merge XCMG Co., Ltd., which is currently the largest absorption and merger transaction in the domestic equipment manufacturing industry.
Reference source: The Paper2022-05-30XCMG Machinery absorbed the merged controlling shareholder XCMG Co., Ltd. with 38.7 billion yuan, with an annual revenue of more than 100 billion
XCMG Co., Ltd. For XCMG Machinery, it is like touching the right hand with the left hand, which is its own treasure, but now that it is synthesized into one, the power is greater.
On July 26 this year, Yang Dongsheng, chairman of XCMG Group, said that a new round of state-owned enterprise reform would be carried out to make the company more dynamic.
XCMG said that the group's main economic indicators have ranked first in China's industry for 35 consecutive years, and more than 1.5 million construction machinery have been sold over the past few decades, achieving an operating income of more than 1.6 trillion yuan.
Yang Dongsheng said that it will be built into a world-class advanced manufacturing cluster in 2027 and achieve the great cause of reaching the summit of Mount Everest by 2035.
Reference source: China Business News2024-07-26XCMG Yang Dongsheng: Promote high-level scientific and technological self-reliance and self-improvement, and implement the "No. 1 Project" of intelligent transformation and digital transformation and network connection
This magnificent vision is inspiring every XCMG worker to move forward bravely, and also makes all walks of life full of expectations and confidence in the future of XCMG.
It's exciting to hear from this goal, so let's wait and see!
epilogue
XCMG is now the leader of China's construction machinery industry, and it is still shining in the world.
It is really not easy for them to come step by step, they all rely on wisdom and sweat.
For the future, XCMG is full of confidence, and they intend to continue to innovate, open up and cooperate, and keep rushing up to challenge higher mountains.
We all believe that as long as the Xu workers work together, they will be able to fulfill their dreams, not only to set a good example for their peers in China, but also to show our China's strength and wisdom in the global manufacturing industry.