Shui On Construction and Materials Ltd, Hong kong, said Monday it has signed an agreement to buy an 80 per cent stake in cement maker Yunnan Cement from state-owned firm Yunnan National Assets Operation Co. Ltd. The purchase will cost about 409 million yuan (approx US$50m), based on a preliminary valuation of the total net asset value of Yunnan Cement of CNY691 million.
On top of that, Shui On said it had signed a deal with building materials giant Lafarge that will give the French group the option to buy 50 per cent of its interest in Yunnan Cement within nine months of the agreement between Shui On and Yunnan National Assets, signed June 18. If it decides to exercise the option, Lafarge will pay Shui On a five per cent premium to what the Hong Kong construction company has paid for the Yunnan Cement stake. Lafarge will also provide Shui On with free technical assistance during the nine months, Shui On said.