Slaughter and May, Hong Kong, is advising its long-standing client China National Building Material Company Limited (CNBM) in relation its merger by absorption of China National Materials Company Limited (Sinoma) by way of share-exchange.
The transaction was announced on 8 September 2017. The effectiveness and implementation of the merger agreement between CNBM and Sinoma are subject to a number of conditions, including approval by shareholders in accordance with the laws of the PRC and Hong Kong. The H Shares of Sinoma will be delisted from the Hong Kong Stock Exchange and cancelled and Sinoma will be deregistered.
The transaction will also constitute a connected transaction and major transaction for CNBM under the Hong Kong Listing Rules, which will be subject to the approval of independent shareholders of CNBM.
CNBM, a state-owned enterprise listed on Hong Kong Stock Exchange (Stock Code: 3323), is the largest cement company in the PRC. CNBM and its subsidiaries are mainly engaged in the cement, lightweight building materials, glass fibre, composite materials and engineering services businesses. As of the last trading date before the transaction, the market capitalisation of CNBM is approximately US$3.47 billion.
Sinoma, a state-owned enterprise listed on Hong Kong Stock Exchange (Stock Code: 1893), is a leading cement engineering company and the fourth largest cement company in the PRC. Sinoma and its subsidiaries are principally engaged in three business segments, namely cement equipment and engineering services, cement and high-tech materials, including glass fibre, composite materials, synthetic crystals and advanced ceramics. As of the last trading date before the transaction, the market capitalisation of Sinoma is approximately US$1.64 billion.
It is expected that CNBM post-merger will rank first globally in terms of cement production capacity, and enjoy world-leading status in various sectors including concrete production, cement engineering service, gypsum boards production, fibre glass manufacturing and wind turbine blades production.