Precision Castparts acquires 49% stake in Yangzhou Chengde Steel
Steel pipe and tubing manufacturer, Precision Castparts (NYSE:PCP) has acquired a 49% stake Yangzhou Chengde Steel Tube (“Chengde”)., a Jiangsu Province, China based boiler pipe manufacturer.
Chengde operates from a six million square foot facility, and
manufactures seamless, extruded pipe for boiler applications in
coal-fired power plants and other energy related markets.
"Chengde's founder Zhang Huaide has built a very impressive
manufacturing operation, and we are excited to partner with him going
forward," said Mark Donegan, chairman and chief executive officer of
Precision Castparts Corp. "The strategic fit of the two companies will
provide a long runway for continued earnings growth in PCC's power
generation business.
Precision Castparts said the logic behind the investment was to
address its lack of manufacturing capacity for seamless boiler pipes.
Financial details of the transaction were not disclosed, but
Precision Castparts did state that it was paying cash and expected the
acquisition to be earnings accretive.
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