China

Anhui Jiangnan Chemical to Acquire DunAn New Energy for RMB 4 Bln

Summary:

 

  • Anhui Jiangnan Chemical Industry Co. (002226.SZ) plans to buyout DunAn New Energy Co. for RMB 4 billion, according to Stockstar.com.
  • Anhui Jiangnan Chemical Industry will finance the acquisition by issuing 456 million shares to DuAn’s shareholders.
  • At the same time, the company plans to raise up to RMB 3 billion through a non-public offering.

 

Why It Matters:

  • Both Anhui Jiangnan Chemical Industry and DunAn New Energy are controlled by the DunAn Group. Anhui Jiangnan Chemical Industry mainly focuses on the manufacture and distribution of civilian explosives, while DunAn New Energy focuses on renewable energy businesses. This move indicates Anhui Jiangnan Chemical Industry’s plan to enter the renewable energy sector.
  • Anhui Jiangnan Chemical Industry says that the RMB 3 billion raised from the non-public offering will be invested in the further development of DunAn’s several wind power generation projects.
  • In the transaction agreement, DunAn New Energy promises to generate a net profit of more than RMB 142 million, RMB 243 million, RMB 347 million and RMB 436 million in 2017, 2018, 2019, 2020 respectively.