BEIJING – China National Chemical Corporation (ChemChina), a leading international diversified chemical company, and the Blackstone Group (Blackstone), a leading U.S. private equity firm, announced a strategic partnership to build a global leader in the special chemicals industry on September 10.
The Blackstone Group will pour $600 million into the China National BlueStar (Group) Corporation (BlueStar), a wholly-owned subsidiary of ChemChina, and acquire a 20 percent stake, according to Blackstone.
After the transaction, Blackstone will appoint Anthony Leung and Ben Jenkins, both senior managing directors in Asia, to join BlueStar’s board.
“We believe that sustained economic growth will drive long-term growth in China’s chemical sector,” said Antony Leung, Blackstone’s chairman of Greater China. “It is a privilege to invest alongside a superb management team in a leading company in one of China’s key industrial sectors.”
“BlueStar’s focus on innovation and technology has made it the leading special chemicals company in China,” added Ben Jenkins, head of Blackstone Asia Pacific Private Equity. “We are looking forward to using our global network to accelerate and extend growth of BlueStar both in China and abroad.”
Commenting on the deal, Mr. Ren Jianxin, chairman of ChemChina stated, “We are excited to have Blackstone as a long term partner. Given Blackstone’s extensive and successful experience in the global chemical industry, notably past ownership of Celanese Corp. and Nalco Company, this investment will assist BlueStar in its growth and expansion.”
UBS AG acted as financial advisor to ChemChina, and Merrill Lynch was Blackstone’s financial advisor on this transaction. The transaction is subject to final regulatory approvals.
BlueStar, meanwhile, is planning a dual listing in Hong Kong and Shanghai, local media reported earlier. The company has three listed subsidiaries including New Chemical Materials, BlueStar Cleaning and Shenyang Chemical Industry. These companies have suspended share trading since September 6.
Founded 23 years ago in Lanzhou, western China’s Gansu Province, China National BlueStar (Group) Corporation is now a leading manufacturer of new material and special chemical products. Since 2001, it has forayed into auto repair and maintenance. Currently, it also manufactures auto glass. Early in 2004, BlueStar participated in the bid to acquire shares of the South Korea automaker Ssangyong Motor, yet finally lost it to SAIC (Shanghai Automotive Industry (Group) Corp.).