Sinomach merges with state textile giant China Hi Tech Group Corp

China National Machinery Industry Corporation (Sinomach) merges with textile giant China Hi-Tech Group Corporation, The merger between the two groups was approved by China’s state council.

The textile conglomerate has become a wholly-owned subsidiary of Sinomach, an equipment manufacturing group, and will no longer be directly supervised by the State-owned Assets Supervision and Administration Commission (SASAC).

The SASAC has planned to reduce the number of central SOEs to under 100 as part of the ongoing reforms to improve efficiency of the companies.

Li Jin, chief researcher with the China Enterprise Research Institute said that the merger was in line with the country’s aim to raise the competitiveness of SOEs, bringing technology and research capabilities to companies such as China Hi-Tech Group, which is in an industry with shrinking revenues

In afternoon trading, the shares of subsidiaries under the two companies soared as investors stay bullish on the synergy that the merger will bring.
Jingwei Textile Machinery Company, a subsidiary of China Hi-Tech Group, for example, jumped more than 5 percent on the news of the merger.

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