The bid by US private equity Carlyle Group to buy into Chinese soda ash producer Shandong Haihua Company is proceeding.
On 6 June 2007 Shandong Haihua received notice from parent firm Shandong Haihua…
The bid by US private equity Carlyle Group to buy into Chinese soda ash producer Shandong Haihua Company is proceeding. On 6 June 2007 Shandong Haihua received notice from parent firm Shandong Haihua Group (Haihua Group) saying a memorandum of understanding (MOU) signed between Haihua Group, Carlyle and the local government of Weifang, where the chemical manufacturer is located, has come into effect. The MOU says that Haihua Group and Carlyle have agreed to set up a joint venture, with Carlyle putting in cash and Haihua Group putting in assets including equity in Shandong Haihua Company while maintaining its controlling position. The MOU will be valid from 6 June to 5 July 2007. Holding a controlling share of 49.07% in Shandong Haihua Company, Haihua Group is 80.4% owned by the Weifang local government and 19.6% by China Haohua Chemical Industry (Group) Corporation. Carlyle“s choice of the Shandong company as its target reinforces its earlier claim that it is strongly interested in top-ranking state-owned companies in China. Market watchers say Carlyle may enter the Haihua Group by buying a part of the local government“s shareholdings in the company.