Tangshan Jidong Cement may buy Shaanxi Qinling Cement

Byswb

Updated Tue, 17 Feb 2009 00:00:00 GMT

Tangshan Jidong Cement Co., a leading Chinese cement maker, is in talks to buy a 26 percent stake in rival Shaanxi Qinling Cement Co. and is planning to build new production lines.

Jidong may acquire 170 million shares from shareholder Yao County Cement Factory, Qinling said in a statement, without giving financial details. Jidong said the transaction, if completed, would make it Qinling's largest shareholder.

Shares of both companies will be suspended for three days from yesterday pending more information about the proposed acquisition, according to separate statements by the companies. Jidong is traded in Shenzhen and Qinling in Shanghai.

Jidong is using 2.93 billion yuan ($429 million) raised in a June share sale to build new production lines to expand in the western province of Shanxi and the southwestern city of Chongqing, the Shandong-based company also said in a separate statement.

China is spending 4 trillion yuan ($585 billion) on a stimulus package to support its sagging economy and will invest in infrastructure projects including roads and housing. The government may also approve a tax rebate plan for light industries, the Shanghai Securities News said last week.