Listed Hong Kong units of Chinese cement majors merge
Last year’s joining of CNBM and Sinoma overtook world-leader Switzerland-based LafargeHolcim in size
The listed units of China’s largest and fourth-largest cement producers have agreed to merge, following the marriage of their two parent companies last year, as part of Beijing’s effort to consolidate a domestic industry saddled with overcapacity.
State-owned parent firms, China National Building Material Group (CNBM Group) and China National Materials Group (Sinoma Group) were ordered by Beijing to merge last year to create the world’s largest building materials maker, surpassing Switzerland-based LafargeHolcim.
Each holder of Sinoma shares will receive 0.85 CNBM shares, the two firms said in a filing to Hong Kong’s bourse late on Friday.
CNBM shares rose as much as 3.8 per cent soon after market opened on Monday, but the gain steadily eroded and closed the morning session 2 per cent lower at HK$4.92 (US 63 cents).
Sinoma also gave up much of its early gains and closed the session 12.6 per cent higher at HK$4.03.
The exchange ratio agreed by CNBM and Sinoma has given due consideration to factors such as capital market performance, business and operating result, said a joint statement from both Chinese cement companies on Monday.
The shares exchange offer represents a premium of 19.2 per cent over the ratio of the last trading prices of CNBM and Sinoma before the merger announcement. The the central government has around 100 offshoots to administer the state firms.