Zijin Mining in $4.4b foray

Zijin Mining (2899) is to take a 20 percent stake in Zhaojin Mining Industry (1818) for HK$4.4 billion.

The deal involves the purchase of 654 million H-shares.

Zijin subsidiary Gold Mountains will buy the stake currently owned by Shanghai Yuyuan Tourist Mart by way of block trade.

Tycoon Guo Guangchang's Fosun International (0656) is the largest shareholder of Shanghai Yuyuan.

Gold Mountains will become the second-largest shareholder of Zhaojin Mining once the transaction is completed.

At present, Fosun's Yuyuan, Shanghai Laomiao and Shanghai Fosun together hold a 25.46 percent stake in Zhaojin while Shandong Zhaojin - with the government of Zhaoyuan City as the actual controller - is the largest shareholder. Funds for the acquisition will be self-financed by Zijin.

The company said the acquisition will increase its gold reserves and further enhance its position in the industry.