Masterwork to become largest Heidelberg shareholder

In an attempt to further improve its market position in the packaging printing segment, Heidelberg has signed an agreement with Chinese post-press specialist Masterwork Group Co (Masterwork) under which the latter will obtain an 8.5% stake in the former.

28 Jan 2019 | By Rushikesh Aravkar

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A press statement from Heidelberg read, Masterwork is to obtain the 8.5% share capital under a cash capital increase from authorised capital excluding shareholder subscription rights.

The implementation of the capital measure is subject to approval by Heidelberg’s supervisory board. Subject to approval by the relevant bodies on both sides and the Chinese authorities, it should provisionally take place by the end of the first calendar quarter of 2019.

The total value of the investment is Euro 68.99m (Rs 5,597m) and the issue price of the new shares is set to be Euro 2.68. If the market price significantly outstrips the envisaged issue price, this will be renegotiated in line with statutory requirements. Following the announcement on 23 January, Heidelberg’s share price climbed by more than 20% to Euro 2.08.

Heidelberg CEO, Rainer Hundsdorfer, said, “The Heidelberg management board and supervisory board are delighted that our long-standing, successful collaboration with Masterwork is to become much closer. This opens up further potential in the growing packaging printing segment, especially in China – the world’s largest individual market. We are expecting better capacity utilisation at our plants across the globe to make us far more efficient, but I would like to stress that this will not weaken our sites in Germany. We are delighted that in Masterwork we are obtaining another long-term investor that firmly believes in the company’s innovative prowess, strategy, and potential for the future,”

Heidelberg’s current largest shareholder is Ferdinand Rüesch, who has owned a stake of around 9% in the business since summer 2014. As the number of shares are increased, Rüesch’s stake in the manufacturer will reduce to nearly 8% following the approval of the Masterwork investment.

The funds Heidelberg generates with the capital increase are to be used to accelerate its digital agenda, including digitising products, processes, and business models, and for general business financing.

Heidelberg is currently considering and discussing whether it will seek to obtain a shareholding in Masterwork.

Masterwork president, Li Li added: “Heidelberg is our ideal partner for jointly leveraging growth potential in the packaging printing market. The stake we are obtaining in this long-established company and world market leader underlines that we are in it for the long haul and are confident Heidelberg has adopted the right strategy.”