China chemical giant to acquire Germany's KraussMaffei

China's biggest state-owned chemical firm today announced it will buy Germany's KraussMaffei Group, which makes machinery for producing plastics and rubber, for 925 million euros (USD 1.0 billion).
China National Chemical Corp, also known as ChemChina, said the planned acquisition would mark the largest investment ever in Germany by Chinese companies.
The Chinese government has encouraged its state companies to invest overseas to secure supplies of raw materials and gain expertise in international business.
ChemChina last year announced the acquisition of Italian tyremaker Pirelli in a 7.4 billion euro deal.
ChemChina -- one of more than a hundred state-owned enterprises which reports directly to the central government -- has formed a consortium with Guoxin International Investment Corp and AGIC Capital to acquire the German company from private equity firm Onex Corp, the statement said.

ChemChina Chairman Ren Jianxin said in the statement that the move would allow his firm to expand product offerings.

The deal is still subject to anti-trust clearance but ChemChina has pledged to retain the current management and employees and keep KraussMaffei's headquarters in the German city of Munich, according to the statement.
KraussMaffei dates back to 1838, originally producing train locomotives and tanks for the military, before moving into the plastics industry, its website showed.
"As part of ChemChina, we expect to considerably accelerate our growth strategy, especially in China and Asia, and to further strengthen the company in Germany and Europe," KraussMaffei Group Chief Executive Officer Frank Stieler said in a separate statement.

In 2012, Chinese construction equipment giant Sany Heavy Industry took over German family-owned engineering firm Putzmeister in a deal then valued at around 500 million euros.