A CONSORTIUM led by China's Changsha Zoomlion Heavy Industry Science & Technology Development Co said yesterday it had completed the acquisition of Italy's CIFA SpA, which manufactures concrete-making equipment.

Zoomlion acquired 60 percent and other financial investors, including China's Hony Capital, Wall Street giant Goldman Sachs and °?Sino-Italian private equity fund Mandarin Capital Partners, bought the remainder.

The deal is valued at approximately 511 million euros (US$753 million), including a total equity contribution of 271 million euros and debt financing of 240 million euros, the consortium said in a statement.

By combining the top European concrete machinery brand and China's major construction equipment manufacturer, the deal creates the world's largest concrete machinery maker.

Milan-based CIFA, or Compagnia Italiana Forme Acciaio, makes equipment including concrete pumps and mixers, and has a 20-percent market share in western Europe, as well as a growing presence in the Middle East and Russia.

It had sales of 300 million euros in 2007.

Existing CIFA products will continue to be produced by CIFA and marketed under the CIFA brand. Maurizio Ferrari will remain chairman of CIFA and serve as a vice-president of Zoomlion.

The statement said the deal is expected to increase earnings for the Shenzhen-listed Zoomlion in its first year. Added savings are expected from a coordinated expansion into emerging markets.

However, a recent report from the financial services company UBS said the growth of concrete machinery sales in June and July had fallen sharply due to weak property construction activities, which would lead to an earnings drop for Zoomlion in the second half of 2008.

"Its aggressive acquisition this year may result in a higher interest expense and intense financial leverage," UBS said, arguing the CIFA deal wouldn't contribute to Zoomlion's earnings in 2009 because of lower demand and the deal's heavy cost.

However, UBS was positive about Zoomlion's strategy of expansion, and gave its shares a 12-month price target of 14.6 yuan (US$2.14). Zoomlion gained 0.79 percent to close at 12.78 yuan yesterday.