Asia Cement (China) reaches Sichuan purchase deal

Asia Cement (China) Holdings Corp, the Chinese unit of Taiwans second-biggest cement maker, has reached a share purchase deal with Sichuan Lanfeng Cement Co.

In a filing with the Hong Kong Stock Exchange, Asia Cement (China) said it had acquired 100 per cent of the equity interest in Sichuan Lanfeng for CNY2.005bn (US$322.25m) through its wholly-owned subsidiary Sichuan Yadong Cement Co.Upon the completion of the acquisition, Sichuan Lanfeng will become a wholly owned subsidiary of Sichuan Yadong, Asia Cement (China) said in the filing.

The proposed acquisition, which was first revealed by Asia Cement (China) on 3 April 2014, is still pending approval from authorities. The company expects to close the deal by 31 May, according to the filing.
Sichuan Lanfeng Cement operates two new dry process lines, with a total output of 5Mta, in Pengzhou City in Sichuan Province.

Credit Suisse AG said the deal would allow Asia Cement (China) to become the largest cement producer in Chengdu with an annual capacity of 11Mta, or a market share of up to 45 per cent, from 6Mta. The company's overall production in China is to rise to 35Mta following the latest transaction.

On Monday, the Hong Kong-listed Asia Cement (China) said in a filing to Hong Kong Stock Exchange that its first-quarter net profit would be more than 1300 per cent higher than the CNY8.5m a year earlier, attributing the earnings surge to an increase in average selling price and a decline in coal costs during the period.