Northern Heavy Industries buys stake of France's NFM

China's Northern Heavy Industries Group Corporation (NHI), the parent of Shenyang Heavy Machinery Group Co., Ltd, has acquired a controlling 70% stake of France's NFM, a unit of Germany's Wirth Group, NHI chairman Geng Hongchen said on Tuesday.

The acquisition would bring NFM's advanced technologies and brands of tunnel boring machines to NHI, said Geng, adding that the deal was finally reached through two years of negotiation.

NFM had already been providing technologies and key machine parts for NHI before the deal. A Wirth representative was quoted by an NHI statement as saying the deal meant both sides started cooperation in the capital field.

NFM has sold 25 shield tunneling machines to China since it became a unit of Wirth Group in 1991.

The sources say that NHI and NFM would set up two research centers in Shenyang, China, and Lyon, France, in the next three years.

NHI, based in Shenyang, capital of northeast China's Liaoning Province, has so far won RMB 1.9 billion worth of contracts involving 18 shield tunneling machines in the Chinese market.

In 2005 Shenyang Heavy Machinery set up a joint venture to produce tunnel boring machines with Wirth and NFM.

Shenyang Heavy Machinery held a controlling 52% stake in the joint venture - Shenyang Wirth TBM Co., Ltd at that moment, while Wirth and NFM each held 24%.