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[January 2008]
CRH Agrees to Acquire 26% Shareholding in Yatai Cement
CRH plc, the international building materials group, has signed an agreement with Shanghai-listed Jilin Yatai Group whereby CRH will acquire a 26% shareholding in Jilin Yatai Group's cement operations (Yatai Cement) and partly finance a doubling of production capacity, for a total CRH investment of RMB 2.1 billion (€0.2 billion).
The agreement also includes an option for CRH to increase its holding in Yatai Cement to 49% by acquiring a further 23% shareholding at an agreed formula after four years. CRH will have representation at financial, operational and Board level and will actively participate in the management of Yatai Cement. The agreement is in line with the terms of the Letter of Intent signed and announced by CRH and the Jilin Yatai Group in October 2006. Completion of the proposed transaction is subject to Chinese regulatory approval.
The operations of Yatai Cement comprise four integrated cement plants and two grinding stations in Jilin and Heilongjiang provinces in north-eastern China, with a current cement capacity of 9 million tonnes per annum. A major investment programme to double annual cement capacity to 18 million tonnes is already underway with completion scheduled for 2009. With this expansion, Yatai Cement will strengthen its leading role in north-eastern China and secure its position as a top 10 cement supplier in China.
In a comment, Liam O'Mahony, CRH Chief Executive, said: "Following our initial acquisition of the Harbin Sanling Cement Company in February 2007 we are very pleased to have the opportunity to invest in Yatai Cement which further increases and strengthens our cement position in northeast China. We are optimistic about the prospects for the Chinese cement industry and look forward to working with Yatai Cement as it further grows its business capitalising on the long-term growth potential and consolidation of the cement industry in northeast China”.
ENDS