SANDVIKEN, Sweden — Sandvik has signed an agreement to acquire 67 percent of Chuzhou Yongpu Carbide Tools Co., Ltd, a China-based maker of solid round tools, with a call option to buy the remaining part in three years.
Chuzhou Yongpu Carbide Tools is mainly focused on global and local OEMs and connected suppliers operating in China. Its capabilities include the full solid round tools manufacturing value chain, covering blanks, cutting tools, reconditioning and coating services. The company will reside in Sandvik Coromant, a division within Sandvik Manufacturing and Machining Solutions.
“The acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd is part of our strategy for our machining solutions business to increase our market share and take a leading position in solid round tools, and at the same time expand further in the Asian market,” explained Stefan Widing, president and CEO of Sandvik. “We are looking forward to welcoming Chuzhou Yongpu Carbide Tools Co., Ltd to the Sandvik Group.”
Chuzhou Yongpu Carbide Tools will continue to operate under its own brand and focus on developing its offer and market share with the ambition to become a leading provider of solid round tools in China. The combined expertise and footprint of Sandvik Coromant and Chuzhou Yongpu Carbide Tools will drive further geographical expansion in the region, particularly for cutting tools, the company said.
“We have long-term strategic commitment to strengthen and develop our business,” noted Nadine Crauwels, president of Sandvik Machining Solutions. “China is a fast-growing market for solid round tools, and the acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd will further strengthen our presence and enhance our offer to customers in this important region. With its premium position and strong customer focus, Chuzhou Yongpu Carbide Tools Co., Ltd is a great fit for Sandvik Machining Solutions.”
Chuzhou Yongpu Carbide Tools is based in Chuzhou, China, and employs about 500. It reported revenues of approximately SEK 400 million for the 12-month period Q2 2020 to Q1 2021, an EBIT margin slightly dilutive to Sandvik Manufacturing and Machining Solutions. Impact on earnings per share will initially be neutral.The transaction is expected to close during the third quarter of 2021.