Aluminum Corp of China, the nation's top aluminum producer,
recently took another step in expanding into the copper business by
acquiring 49 percent of Yunnan Copper Industry (Group) Co, the
country's third largest copper producer.
Aluminum Corp of China, or Chinalco, the parent of publicly
traded Chalco, has bought the 49 percent stake by paying 7.5
billion yuan in cash.
The rest of the company will continue to be owned by the
State-owned assets supervision and administration commission of
Yunnan Province, which sold the stake.
The aluminum major and the Yunnan provincial government inked
the deal - the biggest acquisition in the country's metal industry
this year - on Tuesday in Kunming, capital of Southwest China's
Yunnan Province, where the copper company is headquartered.
Under the strategic agreement, Chinalco will invest an
additional 2 billion yuan for a copper processing project in the
province.
Yunnan Copper Group holds 34.5 percent of Shenzhen-listed Yunnan
Copper Co, which has a market value of 99 billion yuan.
"The newly restructured company aims to achieve an annual
revenue of over hundreds of billions of yuan by 2012," Zou Shaolu,
president of Yunnan Copper Industry (Group) Co, said in the deal
signing ceremony.
The State-owned parent company in Yunnan chalked up 32.7 billion
yuan in sales revenue last year and posted 3.75 billion yuan in
profits and tax.
The stake sale has helped shares of Yunnan Copper Co soar,
driven by investors' anticipation of an asset injection into its
listed arm.
"The stake purchase will be Chinalco's biggest investment deal
this year. We will also explore other domestic copper enterprises,"
said Xiao Yaqing, president of Chinalco.
The deal with Yunnan Copper comes after its $860 million
takeover of Peru Copper earlier this year.
The aluminum major has accelerated its entry into the copper
business this year and has earmarked 30 billion yuan to fund its
expansion into the metal.
(China Daily November 1, 2007)
