Australia's Seven Group (SGH) has signed an agreement to offload its mining machinery division WesTrac China to Lei Shing Hong Machinery (LSHM) for A$540m ($426.72m).
Since it became operational in China in 2001, WesTrac worked in partnership with equipment manufacturer Caterpillar (CAT) to establish a sizable market share in the territories of Shanxi, Hebei, Liaoning, Inner Mongolia, Heilongjang, Jilin, Beijing, and Tianjin, according to SGH.
The proceeds from the sale of WesTrac China will be diverted to SGH’s operations in Australia, including its WesTrac Australia business.
SGH managing director and CEO Ryan Stokes said: “We are proud to have built a market leading position in North East China and we are confident that under the ownership of Lei Shing Hong Machinery, a major CAT dealer in China, our customers will continue to benefit from innovation and first-in-class service.
“WesTrac China has been a strong performing business for SGH and this is the right time to realise the value of what we have achieved.
“SGH’s relationship with CAT remains one of our most important and enduring partnerships, and we continue to be strong supporters of their dealership model. We remain interested in any additional dealership opportunities with Caterpillar.”
LSHM indicated that the acquisition will improve its market position in the region.
The transaction is subject to People's Republic of China (PRC) regulatory approval.