Carlyle Buys 85% of Construction Equipment Manufacturer

Carlyle Group, a U.S. private equity group, recently announced its largest takeover ever in China by buying an 85% stake in China’s largest construction equipment manufacturer, Xuzhou Engineering Machinery Group, for a price of RMB 3 billion (about US$371 million).

The deal has been in the making for two years. Carlyle Group founding partner David Rubenstein said the success of this deal marked a milestone to the company and a crucial moment to be remembered in Sino-US business ties. JP Morgan, the financial advisor to the Xuzhou Engineering, says the deal indicates maturity in China’s legal, regulatory and capital market framework that will be conducive for future deals.

Over the past year, the international private equity fund has raised a record US$10 billion for investments in Asia, three times the total of the previous year. Some large players in this field, such as Kohlberg Kravis Roberts and the Blackstone Group have both set up offices in Asia.