China's largest machine tool company Dalian Machine Tool Group announced its purchase of a 70 per cent stake in a leading German firm in Beijing yesterday.

　　Dong Qingfu, president of the Dalian Machine Tool Group, said his firm has agreed to take a controlling share of Zimmermann AG. The move aims to make full use of the resources and commercial advantages of both parties to expand their sales in the Chinese market and internationally.

　　The transaction value was not disclosed by the new partners.

　　The Dalian group will introduce advanced technology from Zimmermann to fill gaps in the Chinese market, while developing the German firm as the group's overseas base for research and development, training and financial support so as to build a new platform for sales in Europe, Dong said.

　　He said the deal is another major step in the group's globalization strategy. In 2002 and 2003, the Dalian group purchased world-renowned United States firms Ingersoll Production System LLC and CM Systems LLC, showing its overseas expansion intentions.

　　Rudolf Ganzle, president of Zimmermann, said: "The dynamic changes in technology as well as the economy are the big challenges for us today. Taking this into account, it is a logical step for Dalian Machine Tool Group and Zimmermann to start a strategic partnership."

　　A business relationship with the biggest machine tool company in China is a great chance for Zimmermann to improve its business in the country. Meanwhile Zimmermann will be the satellite of the Dalian group in the European market, and a consultant with advanced technological knowledge.

　　Zimmermann is a leading supplier of 5-axe gantry milling machines - advanced metal cutting tools - in the world and its customers are mainly aircraft manufacturing companies such as Boeing and Airbus, and automotive firms including Volkswagen and BMW. It also has a strong customer base in China's aircraft and automotive industries.

　　"Our most important export markets are China and the United States. We concentrate strongly on these core markets where we make more than 50 per cent of our turnover," Ganzle said.

　　When asked whether he had worries about the future of Zimmermann after the deal with Dalian Group, Ganzle commented: "No. We have contracts and commitment from the Chinese partner for sustained development of Zimmermann in Germany."

　　"After merging into the Dalian group, Zimmermann saw its capital increase by 2.8 times and this creates favourable conditions for the steady and fast development of Zimmermann," Dong said.

　　With about 150 employees, Zimmermann has an annual sales revenue of US$35 million. The Dalian group, however, has more than 6,000 employees and reported sales of 5.88 billion yuan (US$711 million) last year.

　　Dong said that at the beginning of the group's globalization drive, some foreign counterparts worried that the Dalian group would take technology and then close down the bought-out firms.