Dhe former employer president Dieter Hundt has sold his automotive supplier Allgaier to a Chinese investor. The company announced this on Monday in Uhingen. The investor Westron took over the majority of the shares in the traditional Swabian company on July 1st.
The Allgaier Group, which is based in Uhingen to the east of Stuttgart, was founded in 1906 and, as a supplier to the automotive industry, deforms sheet metal, for example, but is also active in machine and tool construction and manufactures screening systems, for example. The company has around 1,700 employees and was financially stricken for a long time. Incoming orders in toolmaking declined sharply. The chip crisis and the pandemic hit the company. In December 2020 it was said that the financing was only secured until 2023. The company responded by cutting costs and downsizing. Recently things have apparently gone up again. The order intake of 650 million euros in 2021 was a “historic high” and there was a “gratifying increase in sales”.
The German Ministry of Economics, which can veto takeovers by non-EU foreigners, reviewed and approved the sale shortly before the Russian invasion of Ukraine in February. Since then, geopolitical tensions with China have increased massively. Politicians are calling on local companies, especially in the automotive industry, to diversify more and reduce their dependence on China.
Hundt was one of the most influential entrepreneurs in the country for many years. From 1996 to 2013 he was President of the Confederation of German Employers’ Associations and is now BDA Honorary President. He also headed the supervisory board of VfB Stuttgart for more than a decade. The entrepreneur has had close ties to China for a long time. He is Chairman of the Supervisory Board of the Zhongde Metal Group, which advises German medium-sized companies in China and Chinese companies in Germany. The manager has worked for Allgaier since 1975, initially as managing director, then he gradually took over the shares from the Allgaier family, which owns the company. Under his leadership, the company expanded strongly internationally and also grew through acquisitions. Most recently, Hundt was chairman of the supervisory board and held 75 percent of the shares, his two children each 12.5.
Westron now takes over 88.9 percent of the family’s shares and brings in additional equity. The investor also wants to participate operationally with his “experience in restructuring, the automotive industry and metal processing”. The sale is intended to secure growth and stabilize the financial situation, according to the statement. In the future, the “market in China and Asia should play a central role”. All contracts with employees, financiers and customers would be maintained.
Westron is not entirely unknown in the region. In 2018, the investor, together with a Hong Kong investor, took over a joint venture between the automotive suppliers Bosch and Mahle with 1,300 employees that manufactures exhaust gas turbochargers. According to the announcement, it is an “industrial company whose investment division focuses on the automotive and technology sectors” and has investments in China and Germany. Allgaier has an “excellent reputation in the automotive, environmental and recycling industries,” Westron partner Scanny Cai is quoted as saying. You can already see “a significant increase in sales” in the current year. Cai has worked for Shell and Mercedes and an auto parts supplier in China and Europe in the past, according to his Linkedin profile.
Hundt is quoted in the statement as saying that he is pleased that Westron will successfully manage Allgaier with “its financial possibilities” and give the employees excellent prospects. Westron had “submitted an offer that was competitive in all respects in the bidding process,” said CFO Rolf Graf, according to the announcement. Stilianos Barembas, Chairman of the Works Council, is quoted as saying that the workforce is “very happy” to have found an investor in Westron with whom “all of our jobs” could be secured. So far, the employees have been willing to help the company. They now also want to “work closely with Westron and continue writing the Allgaier success story”.