German packaging and bottle machine manufacturer Krones AG is acquiring Swiss injection press supplier Netstal Machinen AG for 170 million euros ($183.7 million).
The seller is Germany's financially struggling KraussMaffei Technologies GmbH, which lost at least 2.55 billion RMB ($359.3 million) and as much as to 3.0 billion RMB ($422.7 million) in 2023, according to a “pre-loss announcement” issued Jan. 31.
Publicly traded on Shanghai's stock exchange, KraussMaffei has been majority owned by China National Chemical Corp. since 2016.
KraussMaffei’s pre-loss statement, released two days after the Netstal deal was announced, does not directly address the reasons for selling to Krones, but it paints a picture of deepening financial pressures on the company.
KraussMaffei’s losses in 2023 surpass the red ink of 2022 despite a series of reform measures to optimize the organization, such as relocating a factory, consolidating services and streamlining jobs.
The slowdown in global economic growth, international geopolitical conflicts, high interest rates in the United States, weak market demand for some products, and intensified competition contributed to the company’s financial losses, the announcement says.
KraussMaffei officials have always denied speculation that Netstal was for sale but now a deal is moving forward to shed the Swiss company that sold its first injection molding machine in 1945 but has business roots going back to 1857.
These days Näfels-based Netstal builds injection molding machines that produce caps and PET preforms for the beverage, medical and thin-wall packaging markets.
The company generated sales of 200 million euros with more than 500 employees in 2023, according to a news release about the pending deal.
Netstal has been part of KraussMaffei since 1992 and was called KraussMaffei High Performance AG until about three years ago when its name was changed back to Netstal.
At the time, the name change raised questions about whether a sale might be in the works, and in 2023 Plastics News reported on a deal to sell Netstal to another company. But Netstal and KM officials always denied that it was for sale.
Now Netstal will become part of Krones, which posted 2022 sales of 4.2 billion euros, surpassing 4 billion euros for the first time after order intake surged 34 percent compared to the prior year.
Netstal has been a strategic partner of Krones in the past and will benefit the acquiring company several ways despite its profitability being “below the Krones Group level,” the release says.
Krones expects to boost Netstal sales in coming years with the acquired company being part of its segment for filling and packaging technology.
The release says Netstal will retain its business responsibility within Krones, while benefiting from the international set-up and scale of Krones.
The acquisition will give Krone’s closed-loop technologies required for injection molding preforms, producing PET containers and filling, packaging and recycling.
In addition to complementing Krones’ business for beverages, the release says Netstal’s medical and thin-wall packaging segments will support the Krones strategy to diversify into the medical and pharmaceutical markets as well as food and home-personal-care applications.