Noble Group

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Business Times - 10 Jan 2012

Yanzhou bid for Gloucester Coal has 'big chance' of success

(SHANGHAI) Chinese miner Yanzhou Coal Mining Co's A$2 billion (S$2.65 billion) bid to take over Australia's Gloucester Coal has a big chance of success, financial adviser UBS said yesterday.

'We feel that Gloucester is already a listed company and its parent is also a listed company, in Singapore. There should be few obstacles and the chance of success is very big,' David Chin, UBS head of investment banking, Asia, told media in Shanghai.

Yanzhou Coal said in late December that it plans to merge its Australian unit with Gloucester Coal in a deal that would create one of Australia's largest listed coal companies.

Gloucester's major shareholder Noble Group backed the proposed deal.

The deal is another case of a Chinese company buying up natural resource assets in Australia, tapping its commodity base to fuel massive residential, commercial and infrastructure projects across China.

UBS's Mr Chin forecast that overseas resources would continue to be the main acquisition targets by Chinese firms, but Chinese interest in foreign industrial companies is also increasing. 'We feel that there would be more and more outbound acquisitions in the industrial sector,' he said, adding that it was a pity that China's Pangda Automobile Trade Co failed to buy Swedish car marker Saab after General Motors blocked the deal.

Mr Chin also sees more and more Chinese entrepreneurs willing to give up control of the companies they founded, creating more opportunities for foreign investors. - Reuters