China: Anhui Conch has agreed to more than double its stake in smaller rival West China Cement for US$592m amid consolidation in an industry suffering from overcapacity.
Conch International Holdings (HK) Ltd, a wholly owned unit of Anhui Conch, plans to increase its holding in Shaanxi-based West China to 51.57% from the current 21.17%. If the transaction goes through, Anhui Conch will make a mandatory cash offer for all of the shares of West China that it doesn't already own.
West China agreed to buy four units of Anhui Conch and will issue shares in itself to pay for the purchase. West China will issue 3.403 billion shares at US$0.17 each for a total of US$592m. The issuance will raise Anhui Conch's stake in West China. Should Anhui Conch be required to make an offer for the rest of West China, it will pay US$0.22 in cash for each share.
