Holcim Ltd won regulatory approval to buy a controlling stake in China’s Huaxin Cement Co. as the country’s construction boom boosts demand for building materials.
Holcim received China Securities Regulatory Commission approval to buy 160 million new shares of Huaxin, the Chinese company said in a statement to Shanghai’s stock exchange today, without saying how much the Swiss company would pay. The shares are valued at 6 billion yuan ($826 million) based on Huaxin’s Jan. 8 closing price of 37.79 yuan.
Investors are buying into China’s building-related companies, betting earnings will soar on preparations for this year’s Olympic Games and the 2010 World Expo in Shanghai. China National Materials Co., the world’s largest supplier of cement-making equipment, rose 39 percent on its Dec. 20 Hong Kong trading debut.
“The acquisition will help Holcim expand in China,’’ said Pan Lili, an analyst at Huatai Securities Co. in Nanjing, China. “For Huaxin, it will get cash to repay debt.’’
Holcim currently owns 26.1 percent of Huaxin and is the largest shareholder of the Huangshi, central China-based company. The additional share purchase will raise its stake to 50.3 percent, based on Bloomberg calculations.