Aluminum Corp. of China Ltd., or Chalco, agreed to pay 1.29 billion Chinese yuan to acquire a 10.04% stake in Yunnan Aluminum Co. Ltd. through a nonpublic offering.
Chalco will subscribe for 314,050,688 shares from Yunnan Aluminum's offering of about 521,367,759 shares at 4.10 yuan apiece, according to a Dec. 19 news release.
The deal is expected to resolve competition issues between Chalco and Yunnan Aluminum over the business segments of alumina and electrolytic aluminum, among others. Yunnan Aluminum is a subsidiary of Aluminum Corp. of China, Chalco's controlling shareholder.
The shares have a 36-day lockup period. Upon completion, Yunnan Aluminum will not become a subsidiary of Chalco.
As of Dec. 18, US$1 was equivalent to 7.00 Chinese yuan.