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Moody’s: Shanghai Electric unaffected by acquisition
Moody's Investors Service said that Shanghai Electric Group Co. Ltd.'s (SHE) acquisition of Broetje Automation GmbH (unrated) will not affect the company's A2 issuer rating or negative outlook.
On Aug. 14, Shanghai Electric announced that it will acquire Tech4Aero GmbH (unrated), whose major assets include Broetje, a leading supplier of assembly lines and fastening machines to the aerospace industry.
"The acquisition of Broetje will expand and strengthen SHE's industrial automation, which is part of the company's strategy to improve its manufacturing competitiveness," Moody's vice president and senior analyst Jiming Zou said in a news release.
The acquisition will expand Shanghai Electric’s international presence as well as help it capture a share of the fast-growing domestic aviation market, by having Broetje as a major supplier to the large aircraft manufacturers.
However, Moody's said it expects the overall credit impact on Shanghai Electric from this acquisition, including earnings contribution and operational synergies, will be limited due to the relatively small scale of Broetje. Broetje recorded €144 million in revenues and €1.8 million in net profit in the fiscal year ended September 2015.
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