BEIJING—China National Chemical Corp. (ChemChina) is moving forward with plans to list KraussMaffei Group GmbH on the Shanghai Stock Exchange.
In a Dec. 11 news release, ChemChina said KraussMaffei will become a subsidiary of Qingdao Tianhua Institute of Chemistry Engineering Co. Ltd., a Chinese industrial equipment manufacturer that also makes tire and rubber products.
Qingdao Tianhua, a subsidiary of ChemChina, is listed on the Shanghai Stock Exchange and reported sales of about $72 million for fiscal 2016. KraussMaffei's business would make up roughly 85 percent of the listed company, according to KraussMaffei CEO Frank Stieler.
The transaction, which includes adding KraussMaffei's equity interest into Qingdao Tianhua, is subject to approval by relevant bodies and regulators in China. The request for approvals will be reviewed over the next few months.
"Through the planned transaction, [KraussMaffei is] receiving access to the capital market," Stieler said in a news release. "Through new financial resources, we have the opportunity to continue to develop our company and accelerate our planned growth."
If listed, KraussMaffei's headquarters will remain in Munich. The company reported sales of approximately $1.5 billion in fiscal 2016 and has more than 5,000 employees. ChemChina will continue to control KraussMaffei.
"Through a future listing on the Shanghai Stock Exchange, the perception of KraussMaffei will significantly increase in the Chinese market," Jianxin Ren, chairman of ChemChina, said in a statement. "Chinese investors appreciate German industrial workmanship as well as management competency."
ChemChina bought KraussMaffei, a plastics processing machinery maker, for $1.09 billion in April 2016.