Chinese company reportedly takes control of one of the largest stainless steel makers in China.
According to multiple news reports, Chaoyue Group Ltd, based in Hong Kong, has agreed to purchase two Chinese makers of stainless steel and copper products for around $1.3 billion. The deal follows Chaoyue selling its water purification business in 2012.
According to the China Daily, Chaoyue will pay HK$3 billion in cash to Chung Ming Metal Resources Holdings Ltd for the firms, with the balance in shares and convertible bonds.
The deal gives it control of one of the top 10 producers of scrap-based stainless steel and one of the top five makers of scrap-based copper in China, according to the South China Daily Post.
"With its large production and extensive use of scrap metal in production, the target group is well positioned to capture growth in demand for stainless steel and copper products," it added.
According to a report in Bloomberg, the operations being acquired have the capacity to make 750,000 metric tons of stainless steel and 140,000 tons of copper products per year.