Consolidation is biggest ever in construction equipment industry as companies sign a record-breaking buy-out deal.
Doosan Infracore, South Korea's largest construction equipment maker, has recently acquired Bobcat, the world's largest compact construction equipment company, from Ingersoll-Rand for a sum of US $4.9 billion.
The buy-out is the biggest ever overseas acquisition by a South Korean company. It is also the biggest recorded consolidation in the construction equipment industry. The deal also includes Ingersoll-Rand's attachments and utilities equipment businesses and comes just two years after Doosan moved to take over its national rival, Daewoo Heavy Industries.
The takeover is expected to almost double Doosan Infracore's sales revenue to an estimated US $7.4 billion and take the company into the top seven of global construction companies. The acquisition of Bobcat will serve to strengthen Doosan Infracore's existing product line, while also extending it's presence in the North American and European markets.
"The businesses we are acquiring have outstanding management personnel and engineers, which we consider to be the most important criteria of our acquisition strategy," said Yongmaan Park, vice chairman of Doosan Infracore.
"We therefore plan to maintain the current management to best utilise their expertise and skills in an effort to evolve Doosan Infracore into truly a global company."
Upon completion of this transaction, Doosan Infracore will have a combined network of more than 3 700 dealers worldwide and 20 manufacturing plants in countries as widely spread as the US, China, Belgium, France and the Czech Republic. Doosan has already indicated that it will continue to run its existing businesses and the Ingersoll-Rand businesses separately, once the details of the acquisition are completed and full ownership is assumed.
Analysts predict that this type of consolidation will be a key trend of the construction equipment industry in the years to come. It allows companies to enhance their product range and expand global distribution with minimal risk.