June 12, 2018 / 6:01 AM / 6 days ago

China's Tsinghua University unit to buy aluminum firm for $3.7 billion

BEIJING (Reuters) - A unit of Beijing’s Tsinghua University on Tuesday said it would buy aluminum smelter Tianshan Aluminum for an estimated 23.6 billion yuan ($3.7 billion), in what analysts say is a way for the smelter to become a publicly traded entity.

Xiamen Unigroup Xue Co Ltd 000526.SZ, a Shenzhen-listed education services provider controlled by Tsinghua, said in a statement that it would pay in cash and shares to acquire 100 percent of Xinjiang-based Tianshan over an unspecified time frame, with the final price undetermined. It did not detail reasons behind the acquisition.

“Right now the overall plan is still being discussed,” a Unigroup official told Reuters by phone on condition of anonymity as details were still private. “After the plan is finalised, it will be handed over to the board of directors.”

State-run Tsinghua, which counts President Xi Jinping among its alumni, has interests in a number of companies, including a 1.5 percent stake in Chinese aluminum products distributor Ningbo Fubang Jingye (600768.SS), held via Tsinghua Unigroup.

    Xiamen Unigroup’s acquisition comes in an industry that in May saw state-owned Aluminum Corp of China (Chinalco) [ALUMI.UL] enter a cooperation deal with Yunnan Metallurgical Group Co Ltd.

    Xiamen Unigroup, whose shares are currently suspended from trade pending asset restructuring, said in May it planned to buy an aluminum firm in China’s northwestern Xinjiang region, without disclosing the target or deal value.

    Tianshan has annual aluminum smelting capacity of 1.4 million tonnes, according to Zhang Rufeng, a manager at commodities consultancy Baiinfo. In agreeing to the transaction, it is likely aiming for a “backdoor listing” to make the company publicly tradable via Xiamen Unigroup’s listing, Zhang said.

    An official at Tianshan declined to comment, while Unigroup did not respond to an emailed request for comment.

    Reporting by Tom Daly; Editing by Tom Hogue

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