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Steel Maker Shagang to Acquire Internet Data Center Operators

Shagang, 6/15/17

Jiangsu-based steel maker Shagang (002075.SZ) has announced plans to wholly acquire Qingfeng Investment Management and internet data service provider Deli Xunda Technology (Daily Tech), in a bid to further enter the data center industry. With the completion of the deal, Shagang's primary business will add internet data center operations to its current business focus on steel production.

Shagang plans to acquire 100% of Qingfeng through a combination of cash and stock issuance and 88% of Deli Xunda through issuance of stock. Because Qingfeng holds a 12% stake in Deli Xunda, completion of the current transaction will result in Shagang owning 100% of Deli Xunda.

Qingfeng is valued at RMB 22.9 bln and the 88% stake in Deli Xunda is priced at RMB 2.908 bln for a total transaction value of RMB 25.808 bln.

Qingfeng is a holding company with a 100% stake in Elegant Jubilee, which holds a 49% stake in London-based internet data center firm Global Switch Holdings. Elegant Jubilee also has the right to increase its stake in Global Switch Holdings to 51%.

Deli Xunda primarily offers IDC and related value-added services. The company is also actively developing video cloud services and other cloud computing businesses.

Editor's Note: For more background on the earlier transactions that led to Shagang indirectly owning a 49% stake in Global Switch, please see "British IDC Firm Global Switch Sells 49% Stake to Chinese Consortium" MD 12/23/16 issue.

Keywords: 002075.SZ Qingfeng Deli Xunda M&A telecom Internet data center Global Switch Elegant Jubilee Shagang


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