New Chinese Cement Conglomerate Solidifies Amid Acquisition Talks
What’s new: Xinjiang Tianshan Cement Co. Ltd. is in talks with its largest indirect shareholder, cement giant China National Building Material Co. Ltd. (CNBM), about the acquisition of six of CNBM’s cement-making subsidiaries, according to a Saturday filing to the Shenzhen Stock Exchange (link in Chinese).
According to Tianshan, the deal will be paid for either in cash or by issuing stocks, although it did not reveal the price and production capacity of each subsidiary in question. To complete the deal, Tianshan suspended trading of its shares on the Shenzhen Stock Exchange Monday for a period of no more than 10 days.
What’s the background: Data from the Ministry of Industry and Information Technology shows that CNBM produces 500 million tons of cement annually, more than any other company globally. In 2018, the giant acquired China National Materials Co. Ltd., which holds a 45.87% stake in Tianshan.
The consolidation of Tianshan and CNBM’s cement-making branches comes as CNBM works to reduce single sector business competition following a pledge made in late 2017.
Apart from Tianshan, China National Materials also owns two other listed cement companies, Ningxia Building Materials Group Co. Ltd. and Gansu Qilianshan Cement Group Co. Ltd. Industry insiders speculate that both could be merged into Tianshan in the future.
Quick Takes are condensed versions of China-related stories for fast news you can use.To read the full Caixin article in Chinese, click here.
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