Citic (0267) said its subsidiary Xinye Steel has agreed to pay 13.58 billion yuan (HK$15.52 billion) to acquire 55.25 percent of Nanjing Iron & Steel Group which plans to buy a 60 percent stake in Nanjing Iron & Steel United for the same amount from Fosun International (0656) at the same time.
Nanjing Iron & Steel Group has a 40 percent interest in Nanjing Iron & Steel United and the remaining 60 percent is held by Fosun High Technology, Fosun Industrial Investment, and Fosun Industrial Technology, according to two separate filings by the two companies.
Upon completion of the acquisition, Xinye Steel will hold 55.25 percent equity interest in Nanjing Iron & Steel Group, which will then hold the entire equity interest in Nanjing Iron & Steel United, which directly and indirectly holds in aggregate 59.10 percent equity interest of Nanjing Iron & Steel. The three companies will each become a non-wholly owned subsidiary of Citic.
As Nanjing Iron & Steel's products are complementary to the group's products, the proposed acquisition will further strengthen its competitive advantages in bar steel, wire steel, and plate steel products and increase its special steel production capacity to over 30 million tonnes per annum, Citic's filing said.
