A subsidiary of China South Rail (CSR) acquired 100 percent of a British ocean engineering company's share for 130 million pounds (190 million U.S. dollars) to fill deep-sea robot industry gaps in China, CSR announced in Britain on Wednesday.
Zhuzhou China South Rail Times Electric Co (CSR Times Electric), a subsidiary of CSR, signed an acquisition deal with Specialist Machine Developments (SMD), a British deep-sea robot and sub-sea engineering machinery manufacturer.
The British company, located in Newcastle, offers equipment for deep ocean applications, including underwater engineering machines and remotely operated underwater vehicles that work in hazardous environments worldwide.
SMD is a leading provider of global remotely operated underwater vehicles and manufactures advanced submarine engineering machines.
"The company is the world's leading supplier of commercial submarine mining equipment, with its products exported to more than 30 countries and regions," said Andrew Hodgson, CEO and director of SMD.
The acquisition is expected to help China obtain core deep-sea robotic technology and equipment, according to CSR.
The deal will also help CSR Times Electric absorb the mature industry platform and global sales network of SMD, supporting it to enter the global deep-sea market.
The transaction would complement CSR Times Electric's existing businesses in offshore wind energy, shipyard, marine engineering and drilling and help the Chinese company build an industrial chain for marine equipment, according to CSR.
"China's Belt and Road initiatives would bring new strategic opportunities for CSR and other advanced equipment manufacturing enterprises," said Liu Hualong, the president of CSR.
"CSR not only wants to be a leader of land rail transportation equipment companies, but also wants to do something in the marine engineering equipment field," said Liu.
"The acquisition of SMD is an important step in the company's overall growth strategy to internationalize our operations," said Ding Rongjun, the president of CSR Times Electric.
"We are looking to expand beyond the Chinese railway transportation industry into new product lines with higher technical added value and SMD represented a fantastic opportunity to develop our presence in the ocean engineering equipment industry," said Ding.
In the future, SMD will serve as the global headquarters for CSR Times Electric's deep-water equipment division. At the same time, a Chinese subsidiary of SMD will be set up to develop its presence in the Chinese maritime market.
Research institutions said the deep-sea robot industry is one of the fast-growing marine industries. With marine equipments moving towards deep-sea, large-scale and automation, the prospect of the deep-sea robot industry is vast.
Deepwater expenditure is expected to increase by 69 percent, compared to the preceding five-year period, totaling 210 billion U.S. dollars from 2015 to 2019, according to Douglas-Westwood's World Deepwater Market Forecast.
Douglas-Westwood is a provider of market research and consulting services to the energy industry worldwide.