In a 28 November statement to the Hong Kong Stock Exchange, China Railway Rolling Stock Corp (CRRC) confirmed that its subsidiary CRRC Zhuzhou Electric Locomotive Co. has entered negotiations regarding a 100% takeover of Czech-based Škoda Transportation in a move to further expand into the European rolling stock market.
The two companies have co-operation agreements for the development of light rail vehicles for the Chinese market, and Škoda already supplies electrical and traction equipment to CRRC Nanjing Puzhen for trams and metro cars for the cities of Suzhou and Beijing. The filing does not disclose the proposed price of the acquisition and no legally-binding transaction documents have been signed, although it is understood that CRRC is keen to make a formal proposal by the end of 2016.
Škoda Transportation manufactures the full range of rail equipment, as well as trolleybuses, electric and hybrid buses and advanced traction and electrical systems; if the deal is concluded it will be the first time CRRC has taken over a company with such a comprehensive portfolio.
Škoda generated a profit of CZK588m (EUR21.7m) in 2015, against a total turnover
of CZK18.3bn (EUR677m), with an export business that accounts for over half its total revenues. The company has more than 5000 employees and most recently acquired the Finnish rolling stock manufacturer Transtech.
Over the past few years, CRRC has undertaken an aggressive approach to international growth, with major metro orders in North America and Africa that have involved the creation of local manufacturing facilities.