Sumitomo Heavy Industries Ltd. paid 77.6 million euros ($118 million) for Demag Plastics Machinery in a deal that closed March 3.
The merger ``creates the first globally operating company'' in the injection press industry, the firms said in a March 3 news release announcing the finalization.
The combined company - linking Japan's largest manufacturer of injection molding machines with DPG, a global manufacturer with plants in Germany, China and India - has total sales of 700 million euros, or about $800 million, when adjusting for changes in the dollar-euro relationship. Sumitomo has press factories in Japan, China and the United States.
The announcement was the first time Sumitomo has disclosed a purchase price for DPG.
Sumitomo Heavy Industries is a large industrial conglomerate founded in 1888 and listed on the Tokyo Stock Exchange.
Demag Plastics Group was sold by Madison Capital Partners, a Chicago investment group that had broken the company out from its plastics machinery group, which includes Krauss Maffei and Netstal presses.
DPG is based in Schwaig, Germany. Sumitomo's Plastics Machinery Division is based in Chiba City, Japan.
Klaus Erkes, DPG's president and chief executive officer, said the company will be a strong global player.
``It's mandatory that one should be able to follow one's customers to sites all the world over. And a certain critical mass is needed to succeed in doing so,'' he said in the news release.
Demag and Sumitomo will offer all-electric, hydraulic and hybrid injection presses on a common platform, plus total integrated systems including automation. The Demag name will continue.
``Our joint strategic work has long begun, because we are having great plans,'' said Sumitomo's chief, Katsuhiko Taniguichi, in the release. ``We will be integrating our companies wherever this makes sense and allow each one of us to develop its strengths.''
Taniguichi said Sumitomo and DPG ``will be acting on an equal-eye level and as partners.''
Company officials were not immediately available for comment.
Sumitomo said its sales of injection presses for the fiscal year ended March 31, 2006, were more than 350 million euros ($426 million). Current DPG sales are about 250 million euros ($380 million), the firms said. The firms' sales in dollars reflect the broad swing in the euro/dollar exchange rate between the time periods.