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US buy-out firm KKR completes purchase of seven firms from Siemens for E1.69bn

US buy-out giant Kohlberg Kravis Roberts & Co. has agreed to pay E1.69bn for seven businesses from German electronics firm Siemens after protracted negotiations. The transaction provides yet another example of the in-roads being made by major US firms into the European market.

KKR will own 81 per cent of the new holding company being set up as part of the deal and Siemens will retain the balance.

‘KKR and Siemens worked exclusively on this opportunity for six months as both committed significant resources to the transaction, which is unique in its scope and size,' KKR said in a statement.

The businesses being acquired are Mannesmann Plastics Machinery, Demag Cranes and Components, Gottwald Port Technology, Stabilus, Network Systems, Metering, and Ceramics. Together they have an annual turnover of around E3.5bn.

Johannes Huth, managing director of KKR in London, said: ‘This portfolio of companies provides a unique opportunity to acquire businesses with solid franchises and experienced management teams in a range of markets. Each business is a market leader and we believe there are considerable opportunities to work with the incumbent management and to continue to build the individual businesses.'

KKR is also on the brink of agreeing the purchase of French electronics business Legrand from Schneider Electric for around E3.7bn.

Activity has been building rapidly in the large European buy-out market in recent weeks. It remains unclear whether that reflects a desire to complete transactions before the arrival of the continental holiday period in August or whether vendors are finally lowering their price expectations.

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