State-run East German Company Buys U.S. Importer in First Deal of its Kind
Jan. 11, 1990
NEW YORK (AP) _ A state-owned East German company has agreed to buy a small U.S. distributor of printing machinery in what officials said Thursday was the first foreign acquisition by a state-run East German firm.
Veb Kombinat Polygraph Leipzig Werner Lambertz, a maker of printing machinery for the graphic arts industry, has agreed to buy its U.S. importer and distributor, Royal Zenith Inc. of Great Neck, N.Y., for $25 million, according to the West German bank financing the transaction.
Royal Zenith, which has been renamed Planeta North America Inc., has been Polygraph's sole U.S. distributor for about 30 years, said Allan Malachuk, president of the U.S. company.
Bayerische Hypotheken-und Wechsel Bank Ag (Hypobank), which announced the deal in Munich on Thursday, said it is the first time a state-owned East German firm has bought a foreign company.
A bank official who requested anonymity said negotiations began last year while the government of Erich Honecker was still in power. But the acquisition would not have been possible without the peaceful revolution that deposed the hardline Communist regime in the fall, he said.
Royal Zenith was sold by Dyson-Kissner-Moran Corp., a New York-based investment firm. DKM did not require any U.S. government approval to sell Royal Zenith, which it had owned for about 10 years, said John Fitzsimons, DKM's general counsel.
Fitzsimons and Malachuk declined to comment on the reasons for the sale.
Polygraph is a trading company for five state-run East German factories, one of which is named Planeta and makes the equipment that is sold in the United States, Malachuk said.
The equipment includes printing machinery for the folding carton industry, Malachuk said. He declined to disclose Royal Zenith's sales.
Standard & Poor's 1989 register of U.S. corporates said Royal Zenith had sales of about $80 million. The company employs around 300 people, Hypo-bank said.