(Yicai) Oct. 31 -- Shares in Hunan SUND Technological surged as much as 12 percent today after the Chinese supplier of mid-to-high-end bearings said it will pay no less than EUR8.5 million (USD9.2 million) to take over its German rival Levicron to enrich its product portfolio and expand its overseas footprint.

SUND’s share price [SHE:301548] closed up 5.5 percent at CNY51.80 (USD7). Earlier in the day it surged to CNY55.

SUND has penned a letter of intent to acquire 100 percent equity in Levicron, which is a manufacturer of ultra-precision spindle solutions for CNC milling, grinding and turning, with four natural person shareholders, the Changsha-based company said.

The acquisition will help SUND expand into oil-free bearing products and air-bearing spindles, which use gas as a lubricant, and enhance brand awareness overseas, said SUND, which mainly makes oil-lubricated bearings.

SUND plans to retain Levicron's existing workforce and will keep its business operations and brand independent, it said. The two parties will work together to complement each other’s strengths in technology, management and market development, new product development and market expansion, it added.

SUND will conduct detailed due diligence on the Kaiserslautern-based firm to adjust the transaction terms, determine the actual purchase price, and pen a formal transaction agreement, it said. No date was set for when the deal will close, and it is still subject to approval by German and Chinese regulators.

SUND raked in revenue of CNY63.1 million (USD8.9 million) from overseas markets last year, accounting for 12 percent of the company’s total revenue. The firm makes bearings for industrial drive systems that are applied in energy power generation as well as the petrochemical and shipbuilding industries, according to its 2023 annual report.

Editor: Kim Taylor