German rail technology company Vossloh has reached an agreement to sell its locomotives business to Chinese rolling stock manufacturer CRRC Zhuzhou Locomotive.

Based in Kiel, Vossloh Locomotives specialises in manufacturing diesel and dual-mode locomotives for light mainline and shunting duties.

The business is currently reported as discontinued operations.

The German company did not disclose the exact deal value but said it could be a ‘low single-digit million figure’.

A Vossloh spokesperson said: “Agreed purchase price is still subject to adjustment at the closing date, depending on the development of various balance sheet positions.”

CRRC Zhuzhou Locomotive will inherit all guarantees and sureties that Vossloh had taken on for the locomotives business unit on a contract basis.

Vossloh CEO Andreas Busemann said: “We are excited to announce the sale of the business unit after a long and challenging sales process.

“We have found the optimal strategic partner for Vossloh Locomotives in CRRC ZELC, which has the necessary resources to successfully further develop the locomotives business in the long term.”

The decision to divest the business has been approved by the Vossloh’s supervisory board but is still subject to approval by the authorities of Europe and China.

It will also need clearance from merger control and foreign trade laws, as well as standard approval from Chinese authorities. The transaction is expected to be completed in the next few months.

The decision to divest the locomotives business unit is part of the company’s strategy to focus on rail infrastructure. It sold its rail vehicles and electrical systems units in 2015 and 2017.

The divestment of the locomotive unit will mark the Chinese group’s entrance into the rolling stock supply sector of Europe.

In January, Vossloh acquired Strabag’s rail milling business.

Strabag Rail, with its four milling machines and 30 employees, joined Vossloh’s Berlin-based subsidiary Alpha Rail Team within its Lifecycle Solutions division.