German conglomerate MAN AG plans to sell its majority stake in equipment manufacturer and metalworker SMS AG to its partner the Weiss family.
The Meinerzhagen, Germany, firm makes Battenfeld injection presses, Battenfeld Gloucester film equipment and American Maplan and Cincinnati-brand extruders. Other SMS businesses include metallurgy, rolling mills and metal tubing. An SMS spokeswoman said SMS plans no immediate changes or any sale of its businesses when the Weiss takeover is done. Heinrich Weiss has been SMS chairman for 30 years.
The first part of the transaction will be transforming SMS from a public company to a private one. Then, with the approval of MAN's board, MAN will sell 25.5 percent of SMS to the Weiss family for undisclosed terms. That deal will be retroactive to Oct. 1. No later than the year 2007, MAN is to sell its other 25.5 percent stake in SMS to the Weiss family.
MAN and the Weiss family jointly have held SMS since 1973. SMS recently rocked its suppliers by asking them for rebates on goods purchased since mid-2002 and extending into 2005. SMS blamed slowly recovering markets and economic pressures for the rebate program. The company did not reply directly to an e-mailed question on the success of the rebate program, but it indicated that SMS is big enough to have purchasing power to obtain adequate rebates.
MAN said it and its partner agreed ``some time ago'' that MAN would sell its interest when a suitable opportunity arose. MAN spokesman Wieland Schmitz said the market for mergers and acquisitions recently improved and the new financial model, selling MAN's stake in two portions, expedited the sales agreement.
Munich-based MAN said it will focus on subsidiaries that hold leading positions in their markets and that have a ``clear management structure.''
Schmitz said each SMS partner held 50 percent of the venture, making it unclear who had the final say in decisions. MAN's core businesses, all heavily weighted to mechanical engineering, are commercial vehicles, printing systems, diesel engines, turbomachines and industrial services. MAN also provides financing for the businesses.
Earlier this year the Weiss family had a plan to buy MAN and sell MAN's truck division to Volkswagen AG so that MAN could concentrate on machine building, according to Heinrich Weiss. Although major MAN shareholders and Volkswagen agreed to the plan, MAN's management board scuttled the agreement and the Weisses subsequently dropped the project, Heinrich Weiss said in an e-mail.