Steinway Musical Instruments, the famous piano maker controlled by US hedge fund billionaire John Paulson, has attracted takeover interest from China Poly Group.
When Steinway Musical Instruments Inc. was bought in 2013 by John Paulson’s hedge fund firm, Paulson & Co., it was taken private for around $512 million. Bloomberg News has reported that it could fetch $1 billion if the iconic piano maker is set to change hands once again.
Poly Group is a multi-industry company. They started in 1992 as a supplier of defence equipment for the Chinese military. A profile about them in The New York Times noted the strange contrast of being able to buy a painting on the third floor and a missile system on the 27th floor of the company’s headquarters. However, the firm does own artistic endeavours, including China’s biggest home-grown auction house, and a theatre group that recently hosted the London Symphony Orchestra.
It’s not just this that makes China Poly Group a good fit with Steinway though, experts say that Steinway’s current valuation reflects the potential for growth in South East Asia, and particularly in China, so a Chinese company like Poly Group could help improve Steinway’s distribution network in the country. Shaun Rein of the China Market Research Group told iNews that he predicts the firm could reach 30 to 40 percent annual sales growth in China alone.
Steinway’s brands include Bach Stradivarius trumpets, Selmer Paris saxophones, C.G. Conn French horns, Leblanc clarinets, King trombones and Ludwig snare drums.
Steinway would fit with a mission to bring global culture to China and has massive potential in China, as consumers love the brand. As Chinese middle-class families get wealthier, it is expected that they’ll be willing to spend on a luxury piano for their children, as they see music as a key part of their education.
This isn’t a done deal though, other suitors are expected to emerge too…