China: BBMG sells stakes to Jidong Cement

China: BBMG sells stakes to Jidong Cement

Chinese building materials supplier, BBMG Corp has plans to sell its stakes in 31 cement-related companies to Jidong Cement. The stakes on offer are valued at CNY15.5bn (US$2.3bn).

Tangshan Jidong Cement Co Ltd will eventually become a part of BBMG as part of an overall company restructuring. This move comes as the Chinese government tries to get rid of smaller or inefficient players in sectors such as glass, steel and cement. In May 2016 the government stated that it intends would give control of 60 per cent of the country’s cement and glass capacity to the ten biggest firms by 2020.

In a filing by BBMG to the Hong Kong stock exchange the company said, “The asset restructuring is conducive to resolving excess regional production capacity”. In a separate statement Jidong Cement said it aims to raise CNY3bn (US$451m) to help fund the stake acquisitions.