ZOOMLION Heavy Industry Science and Technology Co. said Friday it was bidding to acquire a 60 percent stake in farm machinery maker Chery Heavy Industry Co. for 2.09 billion yuan (US$340 million).

    Shenzhen-listed Zoomlion, seeking to profit from China’s drive to promote large-scale rural modernization, said in a stock exchange statement the move could help propel the company to “become a leading agricultural machinery enterprise in China.”

    The deal comes as major Chinese construction equipment makers such as Zoomlion and Sany Heavy Industry respond to a drop in demand for machines to build high-rise blocks, bridges and roads in the domestic market. Zoomlion issued a profit warning last month, citing sluggish demand.

    The Changsha-based company said it is seeking to acquire 1.8 billion shares in Chery Holding. Chery’s turnover last year was “one of the highest among the agricultural machinery enterprises in China,” the statement said.

    The deal, which is being brokered at the Anhui Changjiang Equity Exchange, will also help Zoomlion compete with international firms like John Deere and CNH Industrial NV, controlled by Fiat SpA.

    Global farm machinery peers have also expanded in China, lured by China’s determination to retool a farming industry, where annual gross output is far behind the U.S. level.

    Zoomlion chairman Zhan Chunxin said in March he was open to various acquisition opportunities. Over the past three years, the company has explored deals outside the construction machinery segment, including commercial vehicle partnerships and the acquisition of manufacturers that make street-cleaning machines, Zhan said. (SD-Agencies)