Warburg Pincus, Baosteel To Acquire Henan Jinkai Chemical For $490M

New York-based private equity firm Warburg Pincus has jointed forces with Chinese industrial gas producer Shanghai Baosteel Gases Limited to acquire the industrial gas assets of Henan Jinkai Chemical Investment Holding Group for RMB3 billion (US$490 million), according to a joint announcement.

The deal is part of a strategic partnership that the two have agreed to establish, that will see them jointly explore and develop projects in the industrial gas field in China.

"Warburg Pincus is committed to the long-term prospects and potential of the industrial gas in China," says David Li, managing director of Warburg Pincus responsible for the firm’s investment activities in Asia. "Our partnership with Baosteel Gases…demonstrates the latest progress in our efforts to participate the ongoing Chinese SOE reforms, in the backdrop of the economic structure transformation and deepening reform in China."

Since entering the Chinese market in 1994, Warburg Pincus has invested more than US$4 billion into Chinese companies including 58.com, AAG Energy Limited, Amcare Hospital Group, China Auto Rental, China Kidswant, China Red Star Macalline, China Southernpec and RDA Microelectronics.

Warburg Pincus has also worked with Chinese state-owned enterprises, with investments or joint projects with Franshion Properties, a subsidiary of Sinochem and China Resources Land.

Established in 2008, Baosteel Gases is a wholly-owned subsidiary of Baosteel Group, China’s leading steel conglomerate. Baosteel Gases cover a variety of areas in industrial gases, synthetic gases, packaged gases and new energy, operating through more than 10 subsidiaries in China’s Eastern, Northwest and Southern regions.

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