China Sanjiang Chemical announced that on August 30, 2023, the company’s indirect wholly-owned subsidiary Sanjiang Chemical planned to acquire 100% equity of Lotte Chemical (Jiaxing) Co., Ltd. from Lotte Chemical Co., Ltd. at a consideration of approximately RMB 212 million.
It is reported that the main business of the target company is the manufacturing and supply of ethanolamine, diethanolamine, triethanolamine, crude triethanolamine, polyethylene glycol monomethyl ether, polyethylene glycol, propylene glycol polyethylene glycol, isobutylene polyethylene glycol, Isopentylene glycol, diethanol isopropanolamine and polypropylene plastic foaming.
The announcement stated that entering into the share purchase agreement will help the group increase its downstream production capacity and increase its local land bank. Vertical integration and streamlining of production processes among companies within the group are the main development trends in the petrochemical industry.
The acquisition of the target company enables the group to supply materials and share public facilities with the target company. Resources will be fully optimized and effectively utilized, thereby reducing operating costs. By acquiring the target company's laboratories and production facilities, the Group can improve the quality, variety and functionality of ethylene oxide derivatives to meet higher and more complex development requirements, and the synergies brought about by the acquisition are beneficial to the Group. The words are significant and their impact cannot be quantified.
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