(Yicai Global) March 3 -- Shares of Tianshan Cement jumped after the firm said it will spend CNY98.1 billion (USD15.2 billion) to carry out one of the most valuable merger clusters ever among listed Chinese firms to surpass Conch Cement to become the country's biggest cement producer.

Tianshan's stock price [SHE:000877] surged as much as 10 percent, remaining 7.2 percent up at CNY18.10 (USD2.80) in the afternoon.

The company will buy all of the equity of China United Cement, and Sinoma Cement, as well as a 99.9 percent stake in South Cement, and almost a 96 percent stake in Southwest Cement via CNY4 billion (USD618.7 million) in cash and by issuing CNY94.2 billion worth of shares to its controlling shareholder and 25 others, the Wulumuqi-based buyer said in a statement yesterday. The price per share is CNY13.38, which is 21 percent less than yesterday's closing price.

Last August, Tianshan revealed its plan to restructure and issue new shares but it didn't disclose other details.

The deals will turn the company into a domestic industry leader from a firm that mainly operates in the Xinjiang Uygur Autonomous Region and eastern Jiangsu province, the statement added.

The transaction will boost Tianshan's capacity to about 400 million tons or more of cement and about 300 million tons of cement clinker. Its sand and gravel output will rise to 100 million tons or even more, it added.

Tianshan will further raise CNY5 billion from up to 35 investors, including its controlling shareholder China National Building Material, via private placement. The proceeds will mostly be used for the CNY4 billion cash provision and to replenish working capital and pay off debts. The issue price is also CNY13.38 apiece.

China National Building Material will have an 87.5 percent stake in Tianshan Cement after the merger, up from 45.9 percent. Publicly available shares still make up more than 10 percent of the outstanding total.

Editor: Emmi Laine, Xiao Yi