Hong Kong-listed shares of Yanzhou Coal Mining, China's fourth-largest coal miner, jumped yesterday, buoyed by its acquisition of Gloucester Coal, the mainland's second-biggest Australian takeover deal. The transaction, which helps Yanzhou secure more coal mines and gain port access in Australia, is the latest sign that Beijing intends to increase outbound investments in keeping with the country's rising economic might. Yanzhou will merge its Australian assets with Gloucester to create Yancoal Australia, which will be listed on the Australian Securities Exchange. Shareholders of Gloucester will be paid A$3.20 (HK$25) for each share and get 23 per cent of the combined Yancoal Australia, which values the acquisition at A$2.1 billion. The remaining 77 per cent of Yancoal Australia will be held by Yanzhou. The takeover, subject to approvals by shareholders and regulators in China and Australia, follows Yanzhou's A$3.1 billion buyout of Felix Resources in 2009, the mainland biggest acquisition in Australia. 'The acquisition paves the way for Yanzhou's aggressive expansion in Australia,' Changjiang Securities analyst Ge Jun said. 'In the short run, the takeover is not expected to bring handsome profits but the consolidation will generate huge profits in the long term if the Australian businesses are well managed.' Yanzhou's H shares climbed 6.62 per cent to HK$16.74 yesterday and the mainland-listed yuan-denominated A shares rose 1.41 per cent to 21.58 yuan. Gloucester, which has mines and projects in New South Wales and Queensland, as well as port assets, jumped 22 per cent to A$8.55 yesterday, the biggest single-day increase in 20 months. Yanzhou is required to list at least 30 per cent of its local assets in Australia by the end of next year, part of the commitments it made to the regulators for the approval to take over Felix. Rising demand for coal in China has prompted Yanzhou's overseas activity. The company, which also has pending projects in Inner Mongolia and Shaanxi, plans to increase output by 25 per cent a year by 2015. Based on the acquisition price of Gloucester, Yancoal Australia shares will be valued at A$10.16. The Chinese company promises to compensate shareholders as much as A$3 a share if Yancoal Australia's price drops below A$6.96 in the 18 months after the deal is sealed. 'Chinese companies' overseas acquisitions are always difficult,' said Professor Zhou Dunren, of Fudan University. 'It all comes down to whether the Chinese bosses can efficiently manage the foreign assets after the close of the deals.' Dealogic data shows Yanzhou's bid for Gloucester was the country's seventh-largest outbound acquisition deal this year. The total outbound acquisitions this year amounted to US$61 billion, up 20 per cent from last year. Singapore-listed commodity trader Noble Group, which owns 64.5 per cent of Gloucester, said it would book a one-time gain of about US$200 million over the deal.