The engineering and automotive divisions of German conglomerate Mannesmann AG will be floated within the next four months, as planned, in spite of the company losing its takeover battle with the UK telecommunications company Vodafone AirTouch.
And according to Rüdiger Franke, chairman of the materials handling division Mannesmann Dematic, it will give Dematic’s crane business a new lease of life and pave the way for international expansion.
Mannesmann succumbed to Vodafone’s improved bid last month, which sees Mannesmann shareholders receiving 49.5% of the combined company. Last year, as part of its defence against Vodafone’s hostile bid, it announced that it would accelerate its plan to demerge its engineering and automotive (E&A) businesses, through an initial public offering, and retain just the rapidly growing, highly profitable telecoms business.
As well as Mannesmann Dematic, the engineering division includes an industrial machinery business (Mannesmann Demag Kraus-Maffei) and a hydraulics/components business (Mannesmann Rexroth). These three are roughly equal sized.
Mannesmann Dematic itself comprises: mobile cranes; factory cranes and handling equipment; systems; and components.
The automotive division comprises: motor vehicle engineering (Mannesmann Sachs); and electronic systems for the automotive industry (Mannesmann VDO).
The new E&A business will have sales of about DM24bn ($12bn) a year and 88,300 employees.
In recent years the Mannesmann business has been characterised by phenomenal growth in telecoms and strong growth in the automotive business, but comparatively stagnant results from engineering.
Franke said: “I foresee great oppor-tunities for international growth and further expansion of our product range. It will be significantly easier to obtain the capital required for this growth on the international capital markets. Shareholders will be investing in clearly defined corporate and strategic projects. Mannesmann Dematic has taken on a new profile and will be appreciated by the market even better. Therefore innovation, rapid product development and the commitment to our customers will continue to be our top priorities.”
