Masterwork will become a new “anchor shareholder” in Heidelberg should a plan to acquire 8.5% of the shares for around €70 million be approved by authorities in Germany and China. The deal also needs the approval of the Heidelberg supervisory board. No difficulties are anticipated with the deal to be completed by the end of March.
The two companies are partners in finishing equipment, the Chinese company using its state of the art factory in Tianjin to produce the die cutting and foiling platens that Heidelberg sells as part of its strategy of growing in the packaging sector. Masterwork also builds carton gluers in Slovakia, in a factory once owned by Heidelberg.
The venture dates back to 2014 when the joint venture was first announced, at the same time as Heidelberg sold its commercial finishing businesses to Muller Martini. Heidelberg ceased supply of its own platens, taking on the Masterwork machinery instead. At that time there was the promise of closer involvement between the two companies, including outline plans for the Chinese company to produce parts or even presses for Heidelberg at some time in the future.
This is reinforced by the new involvement. According to Heidelberg, while it will continue to assemble presses at is Qingpu factory close to Shanghai, Masterwork will produce components at Tianjin, close to Beijing in the north of the country. The factory is less than ten years old and is kitted out with the latest European made CNC machines for machining parts.
However, the deal will “open up further potential in the growing packaging printing segment, especially in China, the world’s largest individual market,” says Heidelberg CEO Rainer Hundsdörfer. In a previous deal Ferdinand Rüesch, owner of Gallus, merged the business in exchange for around 9% of Heidelberg's shares, a holding that will be diluted by the Masterwork deal.
The supply of components from the Masterwork factory will reduce costs and even out bumps in production. “We are expecting better capacity utilisation at our plants across the globe to make us far more efficient, but I would like to stress that this will not weaken our sites in Germany,” says Hundsdörfer.
The move paves the way for Masterwork equipment to be integrated into Heidelberg's data cloud so opening the way to optimise production and increase efficiency through using data to map production. It will boost the profile of Heidelberg's presses in the vast packaging sector in China.
Masterwork has agreed to subscribe for Heidelberg shares at €2.68 each, a premium of around €1 per share at the time of the offer. Heidelberg says it will use the money to accelerate its transformation into a digital company.
By Gareth Ward
The Masterwork factory at Tianjin is set up to produce components and more for Heidelberg should this be necessary in future. Immediately the Chinese company becomes Heidelberg's largest shareholder and will help consolidate its offering to the packaging world.
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