Mainland chemical maker agrees to pay Euro400m for French firm as it seeks to join industry big league
China National BlueStar (Group) Corp, the nation's largest maker of silicone, is set to join the world's top three producers of the polymer by buying a larger competitor for Euro400 million (HK$3.94 billion).
BlueStar, the sixth-biggest silicone producer, will buy fifth-ranked Rhodia of France, raising the annual output by the Beijing-based specialty chemicals maker to 420,000 tonnes from 220,000 tonnes, it said on its website.
Silicone is used as a sealant in the construction industry and a lubricant in the car and plumbing industries.
BlueStar, which is reportedly planning to raise about US$500 million in a stock market listing outside the mainland next year, will now be able to compete more effectively in the silicone market against the two United States-based market leaders, Dow Corning and GE Advanced Materials.
Beijing has been encouraging its state-owned enterprises to acquire rivals abroad to expand market share and acquire foreign technology and brand names. The purchase is the third overseas by BlueStar and its parent, China National Chemical Corp, in the past year.
The Rhodia acquisition will allow BlueStar to acquire technology in downstream processing, thereby completing its product supply chain, a company spokeswoman said.