Taiwan Cement Corporation recently announced that its subsidiary – Taiwan Cement International will officially merge Chia Hsin Cement Corporation’s subsidiary – Chia Hsin China Corp. which is listed on the Hong Kong Stock Exchange, at the end of October.
Taiwan Cement anticipated the merger would be completed on January 1, 2008, with the move to help both sides become one of the top-three cement producers in mainland China.
In June last year, both Taiwan Cement and Chia Hsin Cement jointly announced that they would merge their operations in the mainland. Since that time, both companies have been working towards realising the merger.
Recently, Chia Hsin Cement said Taiwan Cement has already acquired 284 million shares in its subsidiary in the mainland, almost meeting 90% of original merger goal. With the acquisition of the shareholdings, Taiwan Cement International is seen to have acquired Chia Hsin China.
Taiwan Cement said the Hong Kong Stock Exchange has agreed that the merger of between Taiwan Cement International and Chia Hsin China will be effective by the end of October if Taiwan Cement International can acquire 90% of the outstanding shares of Chia Hsin China.
Taiwan Cement noted it would negotiate with Chia Hsin if its staff will remain stationed at the latter’s Jingyang plant in the mainland.
It is expected that the quoting prices for cement in southern China market will be raised in November, causing more cement producers to join the sector in the fourth quarter of this year.
An institutional investor estimated Taiwan Cement will see sales peak in the fourth quarter of this year, up over 15% from the preceding quarter. It is anticipated Taiwan Cement will see sales grow at a rapid pace this year because of its large expansion in production capacity there.