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CRH buys 23pc China stake

Materials giant CRH has bought a 26 per cent stake in Shanghai-listed Jilin Yatai Group’s cement operations for £148 million.

The deal includes an option for CRH to increase its stake to 49 per cent by acquiring a further 23 per cent stake after four years.

The initial offer was made in October 2006 and completion of the proposed acquisition is now subject to Chinese regulatory approval.

Yatai Cement has four integrated cement plants and two grinding stations in Jilin and Heilongjiang provinces in north eastern China, with a current cement capacity of nine million tonnes per annum.

A major investment programme to double annual cement capacity to 18 million tonnes is already underway with completion scheduled for 2009.

CRH chief executive Liam O'Mahony said: “Following our initial acquisition of the Harbin Sanling Cement Company in February 2007 we are very pleased to have the opportunity to invest in Yatai Cement which further increases and strengthens our cement position in northeast China.

“We are optimistic about the prospects for the Chinese cement industry and look forward to working with Yatai Cement as it further grows its business capitalising on the long-term growth potential and consolidation of the cement industry in north-east China.”