The Company
FEUER powertrain Group ("FPT"), headquartered in Nordhausen (Thuringia, Germany), is a leading global independent manufacturer of crankshafts for passenger cars, trucks, agricultural machinery and industrial engines, as well as the recreational vehicle segment (ATV, motorcycles, jet skis, sport boats, etc.) and the compressor segment. Although much of the current business is based on internal combustion engine applications, growth opportunities continue to exist for FPT from an accelerated outsourcing trend and further diversification of activities.
FEUER powertrain currently operates a total of seven plants with highly automated, flexible production lines at the Nordhausen and Beuren sites (Germany) and in Tunica, Mississippi (USA).
The Transaction
After establishing a leading market position in Europe, FPT's further growth focus is now on the key relevant foreign markets of the USA and China. While strong market access is available in the USA and investments have already been made independently in a production plant that is currently in the ramp-up phase, the strategy for China is to operate there only together with a strong partner that has the corresponding local market access and can contribute financial and management resources that are difficult for FPT as a medium-sized company to obtain to a sufficient extent in the short term without a partner due to the parallel growth steps.
Against this background, the Chinese Haowu Group was selected as a strategic partner following the conclusion of selected transaction dialogs with possible suitable parties. With sales of approximately EUR 2 billion, 4,500 employees and more than 120 group companies, the Haowu Group is active in several segments of the automotive market. In particular, the Haowu Group owns Neijiang Jinhong Crankshaft, one of the leading crankshaft manufacturers in the People's Republic of China.
The transaction structure comprises a strategic, but non-controlling, 50% stake in FPT by Haowu, an option agreement with put and call options to regulate possible further share transfers in the future, and an agreement to establish a joint venture in China.
The planned JV will combine the high-end crankshaft business of both partners in Asia and thus lay the foundation for further growth in the Asian region. The focus of the cooperation in the joint venture is especially on western OEM’s. The contribution of FEUER powertrain lies mainly in the strong technological know-how and the excellent access to European and American premium OEM's, while the contribution of the Haowu Group lies in the excellent access to the Chinese and other Asian markets as well as the experience in building and operating efficient plants in China.
Scope of Mandate
ARGONAS acted as exclusive M&A advisor to FPT and its shareholders, providing advisory and support on all streams of the transaction implementation.
