Merger of China's two construction materials giants to complete around year end
The merger between China’s largest two construction materials companies is expected to complete around the year end.
China National Building Material Group Co said today that it will complete merging with China National Materials Group Corp (SINOMA) by December or January next year.
The announcement came after nine subsidiaries of the two groups suspended trading last week. Various media outlets, quoting business insiders, indicated they were accelerating the merger. The merger was first unveiled in August last year after the State Council, or China's Cabinet, approved the deal.
Seven mainland-listed companies out of the nine resumed trading today, and they all saw their share prices rise amid investors’ bullish expectations of the merger.
The merger will see CNBM acquiring SINOMA’s shares, with the latter delisted from the Hong Kong stock market.
The merger will help reduce the liability of the consolidated giant, cut the debt ratio of CNBM to 167 percent from 228 percent, the announcement said.
It will also create the world’s largest cement company by output. The combined cement production capacity totals around 385 million tons a year, or 22 percent of the nation’s total.