Japan's Komatsu, China's Sinomach in the race for German machine tool maker MAG Group

Japan's Komatsu and China's Sinomach are the two bidders in the auction for German machine tool maker MAG Group, which is valued at as much as €700 million ($890 million), Reuters reported on sunday, citing three sources familiar with the sale process.

Goldman Sachs, which is running the sale, has narrowed the field to the two Asian companies, and hopes to finalise a buyer by the end of the year, the report said.

MAG's US subsidiary, which is owned by US investor Mo Meidar, caters mainly to the aerospace industry.

The report said that Komatsu is seen as best placed to win the auction.

MAG is a leading machine tool and systems company serving the durable-goods industry worldwide offering equipment and technologies, including process development, automated assembly, turning, milling, automotive powertrain production, composites processing, maintenance, automation and software, and core components.

Its markets include aerospace, automotive and truck, heavy equipment, oil and gas, rail, solar energy, wind turbine production and general machining.