Two Chinese industrial firms, Yinyi Group and Impro, have emerged as two of the bidders for engineering giant Doncasters.
According to Sky News, the interest is tentative, but should it progress further, could test the government’s attitude on foreign ownership of British manufacturers.
Goldman Sachs is handling the ongoing auction of Doncasters and is currently narrowing the field of bidders into a second round. A sale of Doncasters is expected to surpass £1bn – potentially up to £1.5bn.
In 2014, the firm made underlying pre-tax profit of around £136m. Its 2015 accounts are expected to be filed at Companies House shortly.
If Yinyi and Impro progress with formal offers, they would then be competing against private equity firms including Blackstone, Carlyle and Clayton Dubilier & Rice. Doncasters declined to comment.
Doncasters employs more than 5,000 people and operates across thirty manufacturing sites.
Last week it was reported that the Prime Minister wanted to bring in a new vetting system for foreign takeovers in order to sniff out “the best deal” for Britain, though there have been no further details yet on just how that would pan out.
Doncasters does currently have foreign backers and has done since 2006. It is part of the portfolio of Dubai International Capital, a private investment vehicle of the emirate’s ruling family, though that is now being wound down.
Prospective deals concerning Chinese investment into data centre operator Global Switch, Sheffield Forgemasters and the Hinkley Point C nuclear power station have stirred up opposition from some parts of Whitehall.