(Yicai Global) June 16 -- Shares of Rainbow Heavy Industries rose after the Chinese heavy gear maker said it signed an agreement to buy the global bulk materials handling business of FLSmidth, a Danish firm that supplies mining and cement production gear and system solutions.

Rainbow Heavy’s shares [SHE: 002483] closed up 4.3 percent at CNY5.55 (78 US cents) apiece today. The benchmark Shenzhen Component Index gained 1.1 percent.

Koch Solutions, a German unit of Rainbow Heavy, will acquire FLSmidth’s global bulk materials handling assets, including the business, employees, product orders, and after-sales service orders, for EUR8 million (USD8.8 million), the Jiangsu province-based parent company said today.

The target assets are mainly those of FLSmidth and ThyssenKrupp, which FLSmidth bought for EUR325 million (USD355.8 million) in 2021, Rainbow Heavy said, adding that they include product operation centers and project implementation centers in Germany, Austria, and Australia and have many clients and complete sales and after-sales global service networks.

The deal will enhance Rainbow Heavy’s market competitiveness and global after-sales service capability and improve its international market share, the company said.

The parties will strive to obtain the necessary regulatory permits and approvals and complete the delivery of the assets by the third quarter, the firm noted.

The first news of the purchase was released in March, but the pair only reached an intention contract.

Rainbow Heavy announced its intention to acquire FLSmidth's global bulk materials handling business in March, with the pair only signing a letter of intent at that time.

Equipment for transporting bulk materials is one of Rainbow Heavy’s three high-end gear businesses. The company owns world-renowned heavy bulk material handling and conveying solution brand Koch through Koch Solutions.

Editor: Futura Costaglione