An announcement from Huaxin Cement Co., Ltd. Class H ( (HK:6655) ) is now available.

Huaxin Building Materials Group Co., Ltd., a major cement and building materials producer with Class H shares traded in Hong Kong, operates under the control of Holcim, one of the world’s largest cement groups. This ownership structure embeds Huaxin within Holcim’s global network and subjects its related-party transactions to heightened regulatory scrutiny under Hong Kong’s Listing Rules.

The company has agreed to acquire a controlling stake in a core target company in the Philippines through a two-phase share purchase transaction valued on an enterprise basis at USD 780 million. In the first phase, Huaxin will indirectly buy 67.623% of the target for about USD 527 million and will later acquire an additional 31.377% via call or put options, with consideration tied to future audited revenue and a minimum of USD 280 million.

Upon completion of the first phase, Huaxin’s purchasing vehicle must make a mandatory general offer to remaining shareholders of the Philippine target, and once the full acquisition closes, the target will become a controlling subsidiary with its financial results consolidated into Huaxin’s group accounts. Because the vendor is a Holcim subsidiary and thus a connected person, the deal is classified as both a disclosable and connected transaction, requiring announcement, a circular, independent financial advice, and approval by independent shareholders.

Several Huaxin directors who hold offices at Holcim have abstained from voting on the acquisition to manage conflicts of interest, and an Independent Directors Committee of non-executive directors has been formed to review the terms. Maxa Capital Limited has been appointed as independent financial adviser to assess whether the share purchase agreement is on normal commercial terms, fair and reasonable, and aligned with the interests of Huaxin and its shareholders.