A unique transaction combining two major copper processors with production in China and Germany formed the basis for a joint venture that created a market leader, said a partner involved in the deal.
Leading copper processing companies KME Group from Europe and Golden Dragon Precise Copper Tube Group of China set up the joint venture with the goal of becoming the only player with fully integrated manufacturing operations in China’s connector segment. KME Group will contribute its German plant in Stolberg to the joint venture.
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“This transaction was unique as it combines two major copper processors under a joint venture, which will control a new production plant in China but also an existing one located in Germany,” Antoine de la Gatinais, a Shanghai-based partner at Gide Loyrette Nouel, told China Business Law Journal. Gide acted for KME. De la Gatinais co-led the Gide team with partner Fan Jiannian in Shanghai.
Fan said that the establishment of the joint venture involved merger control reviews in China and three European countries, contribution of European assets to a Hong Kong entity, and outbound investment approval for Golden Dragon to invest in the joint venture. The joint venture is registered in Hong Kong with the name KMD (HK) Holdings.
The project also required “sophisticated governance structuring to organise the control by the Hong Kong joint venture of its European plant and construction of its Chinese facility”, Fan said.
It will construct the new production plant in Henan province, with production expected to commence during 2014.
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