Friday, Precision Castparts Corp. (PCP) said it has acquired a 49% equity interest in Yangzhou Chengde Steel Tube Co. Ltd.
The cash acquisition is expected to be immediately accretive to earnings. Under the equity method of accounting, PCC siad it will report its share of Chengde's income on an Equity in Earnings of Unconsolidated Affiliates line in its income statement. Other financial terms were not disclosed.
"Chengde's founder Zhang Huaide has built a very impressive manufacturing operation, and we are excited to partner with him going forward. The strategic fit of the two companies will provide a long runway for continued earnings growth in PCC's power generation business," said Mark Donegan, chairman and chief executive officer of Precision Castparts Corp.
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