Bekaert is weighing different paths for its China business and has engaged an adviser to evaluate a possible transaction involving those assets, according to people familiar with the matter. Those people, who asked not to be named as the discussions are private, said the review could put the assets at about a couple billion dollars and may not culminate in a deal.
One option on the table is carving out its manufacturing facilities in the country. Another is adding domestic strategic partners to boost capacity and trim costs. It is the latest example of a global firm reassessing how it operates in China.
The company moved into China in the 1990s, investing over €1.5 billion in the country. According to its website, the footprint spans seven cities and comprises 13 production bases, an R&D facility, two trading companies, plus an Asia regional headquarters. The company describes "significant growth" in recent years in China, particularly in steel cord used to reinforce radial tires.
Sales from China came to €711 million last year, equal to 19% of total revenue, its annual report shows.
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Shares posted their biggest intraday rise since May, climbing as much as 4.9% on Wednesday. They were ahead 2.3% at 11:57 a.m. in Brussels, placing the company's equity value around €2 billion ($2.2 billion).
According to a spokesperson, Bekaert is actively exploring methods to preserve and further strengthen its businesses' long-term edge in technology and manufacturing. "We have also been clear in our communications that we are looking to strengthen the value of the company, transform our business portfolio, and maintain the leadership position of our key businesses," Bekaert said.
If Bekaert pursues a carve-out or brings in local partners, China's role in its cost base and output could shift, with knock-on effects for margins and valuation. The review is preliminary, though, so headlines may outpace hard changes for a while. Keep an eye on announcements if you track the stock or hold exposure to Bekaert.
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