CHICAGO (June 22, 9:30 a.m. EDT) — The April announcement that Mannesmann Plastics Machinery AG would be sold to Siemens AG and Robert Bosch GmbH — two names that embody German high-tech industrial might — raised many questions.
The purchase came after a complex series of events in Europe, including a planned spinoff of MPM as part of a $12 billion engineering, automotive and machinery company dubbed Atecs. That was scotched by Vodaphone AirTouch plc's hostile takeover attempt of Mannesmann AG. After the two called a truce and agreed to merge, Atecs was sold to Siemens and Bosch.
Sound confusing? It was, especially to German executives not accustomed to the business-as-usual turmoil of their U.S. counterparts. And many of MPM's 6,000 employees have questions too.
"In America, companies are sold and bought frequently," said MPM Chairman Wolfgang Vogl. "This is nothing very special. And we Germans are not used to this yet, but we are gradually getting used to it."
Publicly, the owners are saying they will run Atecs as a joint venture. But what does the future hold? How will MPM — a plastics machinery giant but a tiny speck in the Siemens/Bosch empire — fit these powerful industrial groups?
On Wednesday, Vogl sat down with Plastics News machinery reporter Bill Bregar at Van Dorn Demag's NPE booth in Chicago. Many details remain up in the air, but Vogl made clear that MPM remains a solid market leader.
Q. What do you think of MPM's new owners?
A: You should see them both as very modern groups, geared toward automotive, automation, electronics. ... So they are definitely a good fit as owners.
Q: Some people say Bosch and Siemens really wanted Atecs' automotive and engineering business, and that MPM was just kind of thrown in — so now they might turn around and sell MPM. What do you think?
A: We do not believe that this is the case because there has been a clear commitment to continue Atecs for another three years, and they're now trying to allocate businesses to either Bosch or to Siemens. MPM, as such, is a pearl. It is a very well-earning group, which could well (end up) being held by both companies, Siemens and Bosch.
Q: So do you think that will happen?
A: (Siemens and Bosch) have a very interesting company which is called BSH. They make refrigerators and washing machines, home appliances. ... And they own this 50-50. So this model could apply to MPM.
Q: Is this your opinion, or do you have first-hand knowledge that Siemens and Bosch will continue this joint ownership of your machinery company?
A: No, these are my views. This is a possible solution, because these solutions have not been really discussed yet. But this, of course, is a very viable option.
Q: The new owners say they will retain current management and business structures for at least the next three years. Why did they announce this?
A: This was the commitment when they took it over. They said: `We do not want to disturb the development of these companies. (Atecs) is a group of very well-earning companies, so we would not like to interfere.' They will interfere, but in the course of time and to the advantage of these companies.
Q: Mannesmann Plastics Machinery is so small compared with the new owners.
A: That is right. But within the business, we're quite a big company. We are the largest plastics machine-producing company worldwide — the biggest in our market. Of course, we could possibly launch an (inital public offering), or have this Bosch-Siemens (dual ownership). That's another potential issue.
Q: Will MPM do an initial public offering within the three-year period?
A: I can't say that. I don't know.
Q: Is MPM looking at any machinery acquisitions?
A: Yes, we are definitely looking at the Far East. We are looking to buy because we believe we're very strong in Europe, we're quite strong in the United States and we are weak in the Far East. So we would like do something like in terms of a regional acquisition. And of course we do not hesitate also to acquire whenever there's a need for some special technology. We want to grow aggressively.
Q: Did you look at buying Battenfeld's injection molding business?
A: No. Battenfeld would not really fit into our multibrand strategy.
Q: Plus, would there be antitrust concerns?
A: In Germany, for sure, because we would have too large a market share.
Q: In the past, you have stressed that MPM units would cooperate in some behind-the-scenes areas, while remaining competitors overall. Is that still the case?
A: Oh yes, definitely. ... We have five major fields of interests where we find synergies for this group: in marketing, in production, in development, in purchasing and in controlling. So we have coordinators taking care of these fields. In all respects, these companies act independently and act as competitors within their market.
However, there are certain things, like bundling of purchasing, where economy of scale is a bigger issue, because we buy large figures. We have 6,000 employees. We have a $1.2 billion sales volume. So this is a big figure. Everything you get cheaper, you can pass on to the market.
Also, in basic developments in terms of hydraulics, in terms of electronics, in terms of controls. All these basic things can be passed on to the group. We also would not pay for market intelligence five times. We have market intelligence in Japan or the United States, and we make it available to everyone."