Shares in China National Materials Company, or Sinoma, gained as much as 22.9 per cent in Hong Kong after it announced it was being purchased by another state-controlled building materials company.
The agreement will see Sinoma absorbed by China National Building Material Group. Sinoma was still up 12.6 per cent in late morning trade after a trading halt on the company’s shares was lifted, while China National Building Material Group’s stock price was flat.
The merger comes as China pushes to consolidate the number of state-owned players across major industrial sectors, including energy and telecoms.
In late August, China approved the merger of electricity producer China Guodian and coal company Shenhua Group, creating the world’s largest utility provider by capacity.