According to multiple sources, China National Building Materials Group Corporation (CNBM) will take over rival China National Materials Corporation (Sinoma), after an agreement between the two companies was approved by the Chinese government.
The deal is part of an ambitious plan by China under president Xi Jinping’s leadership to revamp its debt-ridden state sector, with the goal of creating globally competitive multinationals through mergers, asset swaps and sweeping management reforms.
China’s state firms made profits of 1.13 trillion yuan (US$169.99 billion) in the first half of the year,a decrease of 8.% on the year, with total liabilities up 17.8% to 83.55 trillion yuan.
Amid concerns about plunging profits, soaring debt and chronic inefficiency, China’s reform programme is aimed at eliminating duplication, waste and competition between firms with nearly identical business structures.
CNBM will be renamed the ChinaConstruction Materials Group.
The new group will have total assets of more than 500 billion yuan.
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