A consortium led by Morgan Stanley’s Asian private equity arm, MSPEA, has signed a definitive agreement with Anhui Conch Cement Company, mainland China’s largest cement company, to acquire a 14.3 percent stake in the company. Based on the company’s closing share price last Friday, the deal would be valued at approximately HK$1.7 billion ($215 million; €182 million).
“We are pleased to build on our existing relationship with the company and hope the equity investment and the share reform plan will enhance management standards,” IFC associate director Karin Finkelston said in a statement.
Although the company’s profit has declined in recent months due to government efforts to limit the growth of China’s real estate market, the company’s share price is up more than 30 percent in the past three months. Anhui Conch, the fifth largest cement company in the world, is majority-owned by the Anhui provincial government.
By acquiring a stake in the company, Morgan Stanley is following in the footsteps of many other private equity firms in China hoping to profit from the country’s rapidly expanding real estate and infrastructure markets. Earlier this year, Morgan Stanley closed a $515 million Asian private equity fund, its first vehicle dedicated specifically for the region.