The world’s second largest aluminium extrusion firm China Zhongwang Holdings Ltd announced yesterday that it now holds a controlling interest in German aluminium extrusion firm Aluminiumwerk Unna AG (ALUnna).
Although no price for the purchase was given, the deal gives wholly owned German subsidiary Zhongwang Aluminium Deutschland GmbH a 99.72-percent equity interest in ALUnna.
According to experts, the purchase enhances Zhongwang’s position in the global aviation market as well as giving the firm a stronger foothold on the European continent.
“The transaction will substantially enhance China Zhongwang’s production capability in seamless extruded aluminium tubes for further optimising our product mix,” said Zhongwang’s president and executive director Lu Changqing.
“With Alunna’s product quality credentials and experience in customer development, the acquisition will expedite the Group’s business expansion into, among others, aviation and automobile industries.”
ALUnna is based in the North Rhine-Westphalia town of Unna, which is situated on the eastern extremity of the Rhur district, nine miles east of Dortmund. The firm produces high-end aluminium extrusion products, mostly consisting of seamless aluminium tubes. Among its list of clients are Airbus, Boeing, Bombardier, Mercedes-Benz, and BMW.
Although Zhongwang’s management was effusive in welcoming ALUnna into the fold, the market was less than enthused, dropping the firm’s stock by 2 percent to HK$4.02 (US$0.51) on Wednesday. The stock resumed trading on August 13 after Zhongwang requested a halt to trading earlier this summer to stave off a precipitous drop in value thanks to revelations by an anonymous short seller.
The company has been dogged by accusations of inflating profits and evading customs regulations for months. Zhongwang has steadfastly denied the allegations, with the latest such response coming in a detailed press release a month ago.
Zhongwang’s subsidiary Zhongwang USA continues to pursue the purchase of Aleris Corporation as well, despite significant opposition from the industry and United States regulators. According to Reuters, a spokesperson indicated that the deadline for closing on the sale has been extended to Friday.