(Yicai Global) April 17 -- China’s Zibo Qixiang Tengda Chemical Co. will acquire a majority stake in Swiss international petrochemical trader Granite Capital SA through a wholly-owned subsidiary in Hong Kong to expand chemical raw materials business and ensure supply chain security.
The company’s wholly-owned unit Qixiang Tengda Supply Chain (Hong Kong) Co., signed a sale and purchase agreement yesterday, the parent company said in a statement today. Under the deal, Tengda will acquire 51 percent stake in the Swiss company for USD36 million.
The Chinese company will acquire the remaining 49 percent stake between 2020 to 2022, with the Fribourg-based firm to decide its exact timing. If the Swiss company fails to realize the transaction during the stated period, it will be automatically completed on January 1, 2023, it said.
The minimum transaction value of the remaining 49 percent stake shall be no less than USD10 million, with the actual transaction value to be determined per price adjustment mechanism agreed by both parties, the statement added.
The acquisition will help the company to expand its chemical raw materials business as such materials are in short supply in the domestic market, and to build diversified raw material supply channels, it said.
The target company is a petrochemical commodity trader holding a large market share in the chemical products segmented market. Its butene-1 products rank first in the US market; its pyrolysis gasoline products are among the top two in the Asian market; and its propylene products rank among the top three in the European and Asian markets, the statement said.
The Swiss company has stable supplies of raw materials in North America, the Middle East and Southeast Asia, and has long-term partnership with international petrochemical giants such as Royal Ducth Shell plc, BASF SE, Saudi Basic Industries Corp., or SABIC, and Emirates National Oil Co., ENOC, it added.
Editors: Mevlut Katik