Sandvik Acquires 67% Stake In Chuzhou Yongpu Carbide Tools For Undisclosed Sum

Sandvik AB SDVKY has agreed to acquire 67% of Chuzhou Yongpu Carbide Tools Co., a China-based premium solid round tools company, with a call option to buy the remaining part in three years. Financial terms not disclosed.
Chuzhou Yongpu Carbide Tools focuses on global and local OEMs and connected suppliers operating in China. It will report in Sandvik Coromant, a division within Sandvik Manufacturing and Machining Solutions.
Chuzhou Yongpu Carbide Tools reported approximately SEK400 million revenues for the twelve months Q2 2020 to Q1 2021, an EBIT margin slightly dilutive to Sandvik Manufacturing and Machining Solutions. Impact on earnings per share will initially be neutral.
Sandvik held Cash and cash equivalents of SEK 17.25 billion as of June 30, 2021.
"The acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd is part of our strategy for our machining solutions business to increase our market share and take a leading position in solid round tools, and at the same time expand further in the Asian market," commented Stefan Widing, President and CEO of Sandvik.
The transaction is expected to close during 3Q21.
Price action: SDVKY shares are trading higher by 0.19% at $26.25 on the last check Wednesday.