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 Sinochem To Buy 51% of Singaporean Rubber Firm GMG Global

Sinochem International Corporate has approved a proposal to offer shareholders of a Singaporean rubber company to buy stakes from them.

The listed subsidiary of State-owned chemical trader Sinochem Corp is targeting a 51 percent stake in GMG Global Ltd a planter and processor of natural rubber listed in Singapore.

Sinochem International has slotted 1.34 billion yuan for the deal, offering shareholders 1.3 yuan per share. It is targeting to buy 1.03 billion shares.

In a statement filed with the Shanghai Stock Exchange, the company said the acquisition would be conducted via its wholly owned Singapore unit, Sinochem International (Overseas) Pte Ltd.

GMG Holding (HK) Ltd and Panwell Ltd are the two largest shareholders of GMG Global, with a combined 60.71 percent stake.

The statement said if the 51 percent level is not reached, the two largest shareholders have promised to transfer some of their shares to Sinochem to meet the target.

After the purchase, GMG Global will be listed on the Singapore Exchange, according to the statement.

The National Development and Reform Commission and Singapore authorities have approved the deal.

The validity period for the offer is between July 25 and Aug 22.

Rubber is one of the core operating sectors of Sinochem International and its market share of sales has ranked the first place in China for several years.

GMG Global's natural rubber business covers Africa, Europe, Asia and North America. It has plantations and processing factories in Cameroon and the Ivory Coast.

Sinochem said the acquisition would boost its presence in the global rubber industry, and help the company obtain upstream resources in Africa.

Natural rubber is one of the most important strategic materials, while more than half of it is used for tires. At present, China's annual yield of natural rubber accounted for 7 percent of the world's total, but its consumption took up over 20 percent.

Experts said the growth rate of the country's domestic natural rubber production is only equal to one-third of the rise rate of its consumption. They see the gap between supply and demand increasingly widening in China.

(China Daily 07/12/2008)