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16 September, 2021

Sauer-Danfoss merger creates `largest mobile hydraulics business`

01 March, 2000

Two of the best-known names in hydraulics, Sauer and Danfoss Fluid Power, are merging their businesses to form what they claim will be the world`s largest dedicated supplier of mobile hydraulic equipment.

The merged business, Sauer-Danfoss, will have a combined workforce of 6,200, a total of 18 factories on three continents and sales of some $840m. Although the companies are stressing that this is a merger and not a takeover, the deal involves exchanging all of Danfoss` shares for Sauer shares worth about $179m, and Sauer assuming $80m of Danfoss` debt.

Sauer, with 3,700 employees and sales of $540m, is larger than Danfoss, which employs 2,500 and has sales worth $300m. The companies contend that the merger will strengthen their global presence and their products lines.Danfoss is particularly strong in the areas of steering and work function hydraulics, while Sauer`s strengths include propulsion and electrohydraulic controls.

No rationalisation plans have been revealed yet, but Sauer`s chairman and chief executive, Klaus Murmann, expects the merger to result in "improved purchasing and operating efficiencies". He adds that "the similarity of our cultures will assist in the integration process".

The combined business will split its headquarters between the US, Germany and Denmark. Murmann will be chairman with Jorgen Clausen, currently Danfoss` chief executive, as vice-chairman. The two companies expect that the deal to add to their earnings by next year, when they predict that sales will rise by 5-8%.

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