China's construction machinery makers to expand overseas

Decelerating demand and intensifying competition at home is likely to encourage more Chinese construction machinery makers to expand overseas, according to Standard & Poor’s Ratings Services. The credit rating agency expects Chinese construction machinery makers to carry out bigger and bolder mergers and acquisitions (M&A) outside China in 2012, and to establish first footholds in overseas markets, such as research and development (R&D) centers. S&P said China’s largest construction machinery makers’ substantial war chests make successful acquisitions more likely. The industry’s rapid growth in the past few years has strengthened revenue bases and eased access to offshore capital markets. A slowdown in demand growth in the domestic construction machinery market and stiffening competition are also likely to fuel overseas expansion plans. (February 27, 2012)