In keeping with the current market consolidation theme, Japan’s Hitachi Construction Machinery has made a $688.5 million bid for ASX-listed Bradken Ltd.
Bradken’s board has unanimously backed the offer, which values Bradken at $3.25 per share and represents a 40 per cent premium to the 30-day VWAP.
In its quarterly results for the three months ending June 2016, Hitachi claimed its strategy was to expand its global market share. This latest bid for Bradken is a part of that plan.
HITACHI EQUIPMENT SALES BY REGION
Throughout the three-month period, Hitachi experience higher sales of its mini and small-sized hydraulic excavators in North America. This was attributed to steady growth in housing starts.
Another bright spot for Hitachi in June 2016 quarter was Europe. Hitachi stated it had experienced demand recovery in France, Germany and North Europe for fuel-efficient hydraulic excavators and wheel loaders.
Although mining machinery sales to Australian remained weak, demand for Hitachi’s construction machinery in the country rose slightly, during the three months.
The Indian Government’s recent focus on infrastructure investment led to a significant increase in Hitachi’s construction and mining machinery sales for the region.
At the end of 2015, the Indian Government implemented the National Investment and Infrastructure Fund to stimulate infrastructure investment programs within the country.