ChemChina to List German Machinery Unit in Shanghai

Syngenta owner China National Chemical Corp. (ChemChina), in a rare move, plans to list its Munich subsidiary KraussMaffei Group GmbH in China.

ChemChina will accomplish the listing by injecting KraussMaffei’s nearly 6 billion yuan ($910 million) of assets into ChemChina’s Shanghai-listed subsidiary, Qingdao Tianhua Institute of Chemistry Engineering Co. Ltd., according to statements from both KraussMaffei and Qingdao Tianhua.

The German machinery giant will make up around 85% of the listed company, said Frank Stieler, CEO of KraussMaffei.

ChemChina will remain in control of KraussMaffei, a status that has lasted for almost two years since it acquired the German company for $1 billion in a record deal.

“Through the planned transaction we are receiving access to the capital market, (and) through new financial resources we have the opportunity to continue to develop our company and accelerate our planned growth,” Stieler said.

It is rare for a Chinese company to list foreign assets on the domestic capital market instead of in the subsidiary’s home country.

Another ChemChina affiliate, Italian tire manufacturer Pirelli & C SpA, returned to the stock market in Milan in October after the Chinese buyer bought a 65% stake and delisted it in 2015. Dalian Wanda Group listed its U.S. movie theater chain AMC Entertainment in New York in 2013.

The latest KraussMaffei deal requires the regulatory reviews of government bodies including the National Development and Reform Commission, the Ministry of Commerce, the State Administration of Foreign Exchange and the China Securities Regulatory Commission, an investment banker told Caixin.

KraussMaffei said it expects to get the approvals over the next few months.

Qingdao Tianhua’s stock has been suspended since July 3, pending “significant asset reorganization,” it said in a filing.

Contact reporter Coco Feng (renkefeng@caixin.com)