Lincoln Electric Holdings said that its Asian subsidiary, The Lincoln Electric Company (Asia Pacific), has signed definitive agreements to expand its welding consumables business in China by acquiring 100% control of Jinzhou Jin Tai Welding and Metal Co, a welding wire business in Jinzhou, China.

Lincoln Asia Pacific currently owns 48% of Jin Tai, and the remaining 52% is held by Taiwan-based Kuang Tai Metal Industrial Co and other partners. Jin Tai's sales in 2008 were approximately $200 million. In light of the currently depressed global economic environment and the forecast for Jin Tai's earnings in 2009, the company expects that the transaction would be modestly dilutive to 2009 earnings.

John Stropki, Chairman and Chief Executive Officer, said: “The definitive agreements signed today represent a strategic repositioning for both parties and marks an important step in the evolution of our business in China. Jin Tai will greatly expand our customer base and brings significant cost-competitive MIG wire manufacturing capacity under Lincoln Electric's control. In addition to improving our market position in China by adding an important consumable offering in welding wire, this acquisition will also provide us a low cost and high quality product platform for major export markets.

In reaching agreement with Kuang Tai and Chairman Chou, Lincoln Asia Pacific will exchange its 35% ownership interest in Kuang Tai for the 52% of Jin Tai that it does not currently own, pay cash of an estimated $38 million and assume Jin Tai's debt of approximately $18 million, subject to final adjustments at closing.

The transaction is subject to approval by both Kuang Tai's shareholders and government regulatory agencies, with closing expected on or about July 1, 2009, subject to the satisfaction or waiver of customary conditions.