(Yicai) Dec. 1 -- Shares in Guangdong Dongfang Precision Science & Technology soared by the exchange-imposed limit today after the Chinese intelligent equipment maker said that it plans to sell its corrugated paper production equipment business assets, including Italy’s Fosber Group, for a total base transaction price of EUR774 million (USD897 million) in order to shift focus to the fast-growing marine propulsion equipment sector.

Dongfang Precision’s share price [SHE:002611] closed up 10 percent at CNY20.24 (USD2.86).

Dongfeng Precision’s wholly owned Dutch subsidiary will sell its 100 percent stake in Fosber Group, which is a global leader in corrugated paper production gear, to Foresight Italy, the Foshan-based firm said in an asset sale proposal published on Nov. 28.

It will also sell all of its equity in Guangdong Fosber Intelligent Equipment, which runs Fosber’s production base in Asia, and Tiruña Guangdong Intelligent Equipment Manufacturing, which manages Fosber’s core components production in Asia, to Foresight US.

Foresight Italy and Foresight US are both subsidiaries of Brookfield Corp., a Canadian asset management and wealth solutions provider listed in both New York and Toronto with more than USD1 trillion in assets under management, the report said.

The two parties will use the internationally recognized Locked Box Mechanism, which fixes the final transaction price on the actual delivery date, according to the equity transfer agreement signed on Nov. 28.

Dongfang Precision bought a 100 percent stake in Fosber for EUR73.9 million (USD85.7 million) in two transactions in 2014 and 2017. It is now selling the Monsagrati-based company for EUR637 million (USD739 million), a more than eight-fold return on investment.

Once the deal is completed, Dongfang Precision will fully exit its corrugated cardboard production equipment business and shift focus to the marine propulsion section, which is an emerging industry with far greater growth potential, the report said.

Dongfang Precision’s marine propulsion product lineup mainly focuses on outboard motors, which are detachable engines used to power small watercraft such as boats and yachts. They are widely used in recreational water activities like yachting and sailing, as well as in emergency rescue missions and maritime patrols. Thanks to rapid economic growth and changing leisure habits, China is becoming one of the fastest-growing markets for outboard motors in the world.

Editor: Kim Taylor