Bloomberg reports that Anhui Conch Cement Co. is to double its stake in West China Cement Ltd for US$592 million. The Chinese cement major currently holds a 21.17% stake in West China Cement, which will rise to 51.57% through the acquisition. Pending approval, Anhui Conch would then have to make a mandatory cash offer for the remaining shares of West China Cement. In a filing to the Hong Kong Stcokj Exchange, West China Cement stated that it would buy four units of Anhui Conch, paid for in shares that will effectively raise Anhui Conch’s stake in the company. The share value is HK$1.35 for 3.403 billion shares. Should Anhui Conch offer for the remaining shares, these would be paid for in cash at HK$1.69 per share.
Slowing demand and excess capacity has led to increasing consolidation in the Chinese cement industry. Bloomberg reports that new home starts fell 24% y/y in October, citing China’s statistics bureau.
Adapted from Bloomberg report by Katherine Guenioui
Read the article online at: https://www.worldcement.com/asia-pacific-rim/30112015/anhui-conch-doubles-stake-in-west-china-cement-87/
