Lincoln Electric Announces Agreement for Acquisition in China
March 16 2009 - 4:28PM
PR Newswire (US)
CLEVELAND, March 16 /PRNewswire-FirstCall/ -- Lincoln Electric
Holdings, Inc. (the "Company") (NASDAQ:LECO) today announced that
its Asian subsidiary, The Lincoln Electric Company (Asia Pacific)
Pte., Ltd. ("Lincoln Asia Pacific"), has signed definitive
agreements to expand its welding consumables business in China by
acquiring 100% control of Jinzhou Jin Tai Welding and Metal Co.,
Ltd. ("Jin Tai"), a welding wire business in Jinzhou, China.
Lincoln Asia Pacific currently owns 48% of Jin Tai, and the
remaining 52% is held by Taiwan-based Kuang Tai Metal Industrial
Co., Ltd. ("Kuang Tai") and other partners. Jin Tai's sales in 2008
were approximately $200 million. In light of the currently
depressed global economic environment and the forecast for Jin
Tai's earnings in 2009, the Company expects that the transaction
would be modestly dilutive to 2009 earnings. "The definitive
agreements signed today represent a strategic repositioning for
both parties and marks an important step in the evolution of our
business in China," said John M. Stropki, Chairman and Chief
Executive Officer. "Jin Tai will greatly expand our customer base
and brings significant cost-competitive MIG wire manufacturing
capacity under Lincoln Electric's control. In addition to improving
our market position in China by adding an important consumable
offering in welding wire, this acquisition will also provide us a
low cost and high quality product platform for major export
markets. "We have had a productive and successful relationship with
our joint venture partner. We look forward to continuing and
expanding our business with Kuang Tai, both as an important global
supplier and as a key customer for Lincoln's global products. We
also look forward to ongoing collaboration with Chou Tai Long,
Kuang Tai's Chairman, to leverage his experience and proven track
record in product development and production technologies." In
reaching agreement with Kuang Tai and Chairman Chou, Lincoln Asia
Pacific will exchange its 35% ownership interest in Kuang Tai for
the 52% of Jin Tai that it does not currently own, pay cash of an
estimated $38 million and assume Jin Tai's debt of approximately
$18 million, subject to final adjustments at closing. The
transaction is subject to approval by both Kuang Tai's shareholders
and government regulatory agencies, with closing expected on or
about July 1, 2009, subject to the satisfaction or waiver of
customary conditions. Lincoln Electric is the world leader in the
design, development and manufacture of arc welding products,
robotic arc-welding systems, plasma and oxyfuel cutting equipment
and has a leading global position in the brazing and soldering
alloys market. Headquartered in Cleveland, Ohio, Lincoln has 38
manufacturing locations, including operations and joint ventures in
20 countries and a worldwide network of distributors and sales
offices covering more than 160 countries. For more information
about Lincoln Electric, its products and services, visit the
Company's website at http://www.lincolnelectric.com/. The Company's
expectations and beliefs concerning the future contained in this
news release are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements reflect management's current expectations and involve a
number of risks and uncertainties. Actual results may differ
materially from such statements due to a variety of factors that
could adversely affect the Company's operating results both prior
and subsequent to closing the above-mentioned transaction. The
factors include, but are not limited to: uncertainties arising
prior to closing that may impact consummation of the transaction;
regulatory clearances; the success of post-closing integration
efforts; and the degree to which actual operating performance of
Jin Tai, subsequent to closing, meets forecasted results. More
generally, the Company's operating results may also vary from
forward-looking statements due to the following factors: the
effectiveness of operating initiatives; general economic and market
conditions; currency exchange and interest rates; adverse outcome
of pending or potential litigation; possible acquisitions; market
risks and price fluctuations related to the purchase of commodities
and energy; global regulatory complexity; and the possible effects
of international terrorism and hostilities on the Company or its
customers, suppliers and the economy in general. For additional
discussion, see "Item 1A. Risk Factors" in the Company's Annual
Report on Form 10-K. DATASOURCE: Lincoln Electric Holdings, Inc.
CONTACT: Media: Roy L. Morrow, +1-216-383-4893, , or Investors:
Joseph P. Kelley, +1-216-383-8346, , both of Lincoln Electric
Holdings, Inc. Web Site: http://www.lincolnelectric.com/
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