* Deal to paid $8 bln in cash, $28.5 bln in CITIC Pacific
* Shareholders to vote on deal June 3, completion expected
by Aug 29
* CITIC Pacific shares up 13 pct since deal first unveiled
(Adds CITIC Pacific share performance, Australia business,
By Elzio Barreto and Denny Thomas
HONG KONG, April 16 China's CITIC Pacific
has agreed to buy the main operating unit of its
parent, state-backed CITIC Group, for $36.5 billion in a stock
and cash deal aimed at diversifying its metals and mining
The purchase will give a much-needed boost to CITIC
Pacific's ailing finances after it miscalculated the huge cost
of developing a mine in Western Australia.
The deal is the biggest injection by any Chinese firm into a
Hong Kong listed company, analysts said, and shares in CITIC
Pacific have gained nearly 13 percent since the company and its
parent unveiled initial details of the purchase in late March.
"The enhanced financing capability should enable CITIC
Pacific to continue the funding of existing capital intensive
projects such as the Sino Iron project in Western Australia,"
CITIC Pacific said in a filing to the Hong Kong stock exchange.
CITIC Pacific will pay 49.92 billion yuan ($8 billion) in
cash and issue 177.01 billion yuan worth of shares to CITIC
Group. It will also sell another 4.66 billion shares to
institutional investors to comply with the exchange's
requirement to maintain a minimum 25 percent free float.
The deal needs to be approved at a shareholders' meeting on
June 3, and is expected to be completed by Aug. 29, CITIC
Pacific said. As part of the deal, the company is proposing to
change its name to CITIC Ltd.
Under the deal, CITIC Pacific will acquire CITIC Ltd, which
has businesses in China ranging from real estate to banking,
securities, infrastructure, energy, natural resources and
engineering. It made a net profit of 34.3 billion yuan in 2013.
CITIC Group, China's oldest and biggest financial
conglomerate, was established in 1979 by Rong Yiren, one of the
few industrialists to stay behind in the mainland after the 1949
revolution. The company was set up with the support of former
leader Deng Xiaoping, and now has 11 stock market-listed
After the transfer, CITIC Pacific will own stakes in the
these listed companies, including CITIC Securities
, CITIC Guoan Information, and
heavy machinery maker CITIC Heavy. It also has a
stake in China CITIC Bank , which has a
market value of $31.8 billion.
($1 = 6.2220 Chinese Yuan)
(Additional reporting by Stephen Aldred; Editing by Miral