Herbert Smith Freehills has advised Arkema (China) Investment Co. Ltd., the Chinese arm of France’s leading chemical producer Arkema, on its RMB3.9 billion (US$644 million) stake acquisition in the production facilities of Taixing Jurong Chemicals Co. Ltd.
The acquisition has created a company called Sunke, a joint venture between Arkema and Jiangsu-based SunVic Chemical Holdings, the indirect parent of Taixing Jurong Chemicals. An initial payment of RMB1.45 billion will give Arkema majority shares of the joint venture at 55% and Singapore Exchange-listed SunVic the remaining 45% stake. Production capacity for Arkema initially will be 160,000 tons a year with the option to raise it without delay to 320,000 tons a year for a further RMB1.4 billion investment.
The acquisitions will enable to Euronext Paris-listed Arkema to accelerate the development of its coating solutions segment in Asia and to assist its customers in particular in fast-growing markets such as super-absorbents, paints, adhesives and water treatment.
The Herbert Smith Freehills team advising Arkema was led by Hong Kong partner Gary Lock, who was supported by Shanghai associate Morgan Jiang. The deal was done in close cooperation with the legal department of Arkema, which included Group General Counsel Jérome Gandon and Hélène Monceaux, Senior Legal Counsel, and head of Arkema’s M&A Department.
In October, Herbert Smith Freehills’ corporate team in Paris also acted for Arkema on the implementation of a Euro Medium Term Notes programme worth €2 billion. In 2012, the firm’s Shanghai office again represented Arkema on its US$365 million acquisitions of two Chinese chemical companies, Suzhou Hipro Polymers Co Ltd, which produces bio-sourced polyamide, and Casda Biomaterials Co Ltd, which makes sebacic acid, a key component of polyamide.
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