China: CNBM Group can begin acquisition of Sinoma

China National Building Materials Group Corp (CNBM) has begun preparations to acquire China National Materials Corp (Sinoma), after an agreement between the two companies was approved by the government, the country's state assets regulator said.

President Xi Jinping is determined to restructure the state sector to creating globally-competitive multinationals in a process of mergers, asset swaps and management reforms.

The CNBM deal was given the go-ahead by the State Council, China's cabinet, on Monday. The new group will have total assets of more than CNY500bn (US$75bn), reports China's Securities Times newspaper.

CNBM, already the country's biggest construction materials producer, will be renamed the China Construction Materials Group. Sinoma's listed vehicle, China National Materials Co Ltd, will become a subsidiary of the new merged entity, Sinoma said in a statement to the Hong Kong stock exchange.