(Reuters) -Hong Kong-listed Zhejiang Expressway said on Tuesday it will absorb Zhejiang Oceanking Development by way of a share swap deal, valuing the firm at around 6.44 billion yuan ($900.33 million).
Under the arrangement, shareholders of Zhejiang Oceanking Development will receive 1.08 Zhejiang Expressway shares for each Oceanking share held.
Zhejiang Expressway will issue A-shares at a price of 13.50 yuan apiece, which translates to a conversion price of 14.58 yuan apiece for shares of Oceanking.
The conversion price for Oceanking represents a discount of around 4.6% from its last close on August 19. Trading in shares of the firm were halted on the day, due to a potential major asset restructuring, and has not resumed yet.
State-owned Zhejiang Communications Investment Group is the controlling shareholder of both the firms. Its owns 67.69% of Zhejiang Expressway and 54.72% of Zhejiang Oceanking Development.
“Upon completion of the merger, Oceanking Development will be delisted and deregistered as a legal entity,” Zhejiang Expressway added in its statement.
Oceanking Development is primarily engaged in the research and development, production, and sales of chloralkali-related products.
($1 = 7.1529 Chinese yuan renminbi)
(Reporting by Shivangi Lahiri in Bengaluru; Editing by Shailesh Kuber)
