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Chinese suitors vie for German coffee machine maker WMF: sources

The WMF two eggs boiler is seen on display during the IFA Electronics show in Berlin September 4, 2014.
REUTERS/HANNIBAL HANSCHKE
KKR & Co LP (KKR.N) has short-listed China's Joyoung Co Ltd (002242.SZ) and KingClean Electric Co Ltd (603355.SS) among others for its planned sale of German coffee machine maker WMF, in another sign of strong interest from Chinese suitors to buy overseas assets, people with direct knowledge of the matter told Reuters.

Others short-listed include France's Groupe SEB, which owns the Moulinex brand, Italy's De Longhi SpA (DLG.MI) and Sweden's Electrolux AB (ELUXb.ST), the people added. Final bids are due by mid-May, the people said, declining to be identified as the sale process is confidential.

The German company is seen fetching more than 1.5 billion euros ($1.7 billion), one of the people said.

The two Chinese suitors are relatively new to overseas acquisitions but their desire to buy big global brands underscore Chinese entrepreneurs' ambition to grow beyond their home market and move up the value chain.

Chinese buyers have been on a tear this year, targeting assets as disparate as hotels, chipmakers and chemicals companies as they diversify out of their slowing home market. Announced outbound China merger-and-acquisitions has reached $94.8 billion so far this year, compared with the record $103.6 billion last year, according to Thomson Reuters data.

Joyoung and KingClean Electric declined to comment. Electrolux and SEB also declined to comment, while De Longhi was not available for immediate comment. KKR declined to comment.

Publicly traded Joyoung and was established in 1994 and is primarily engaged in the manufacture and sale of kitchen appliances. It is especially known for making home-use soymilk makers. Its shares jumped 10 percent on Friday giving the company a market value of $2.3 billion.

KingClean, also established in 1994, mainly manufactures vacuum cleaners. Its stock gained 1.7 percent on Friday, giving the firm a value of about $2.2 billion.

"The Chairman of both these companies are pretty keen to take their companies global," one of the people said. Joyoung is backed by Chinese private equity firm CDH Investments. CDH shot onto global stage when a company it owned, Shuanghui International Holdings, acquired U.S. pork producer Smithfield Foods Inc [SFII.UL] for $4.7 billion.

WMF makes high-end coffee machines mainly for cafes and restaurants as well as cutlery, pots and pans for retail consumers and brings in annual revenue of about 1 billion euros. KKR was open to selling the business split into two, but it received strong bids for the business as a whole. KKR acquired a controlling stake in WMF in 2012 from private equity firm Capvis in a deal valuing the group at about 600 million euros.

Several private equity firms had shown interest in the asset, but are no longer in the running, the people said.

WMF, or Wuerttembergische Metallwarenfabrik, is expecting to post annual earnings before interest, tax, depreciation and amortization (EBITDA) of 150 million euros this year and KKR is hoping to fetch more than 10 times that, several people familiar with the matter said.

(Reporting by Denny Thomas and Arno Schuetze; Additional reporting by Tris Pan and Sumeet Chatterjee; Editing by Lisa Jucca and Christopher Cushing)
Adapted from http://www.reuters.com

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