Sims' $137m spend

Sims Metal Management bought a 20% economic interest in Hong Kong-listed Chiho-Tiande Group Ltd for US$137 million — acquiring 18% mostly from interests linked to founder and chairman Mr Ankong Fang, plus an option over a further 2%.

The deal marks Sims' first direct step into the Chinese market and is its sixth acquisition in the past 12 months, showing the company is deploying cash in tougher trading conditions to expand its footprint.

Chiho-Tiande is a Hong Kong company with operations in China and Hong Kong that describes itself as the largest mixed metal scrap importer and processor in China.

Sims is buying an 18% stake mainly from parties associated with Chiho-Tiande founder and chairman Ankong Fang, and it has acquired an option to buy an additional 2% of the Hong Kong company’s capital, bringing total potential ownership to 20%.

For investors, the US$137 million investment signals Sims is pursuing growth and geographic diversification into China via equity in a major scrap processor. It’s also part of a flurry of deals (six in 12 months), so shareholders may want to note the company’s acquisition-driven strategy and cash deployment.

The article describes the purchase as Sims’ first direct step into the Chinese market by buying equity in a company that operates in China and Hong Kong — it establishes a financial and strategic presence rather than reporting full operational control.

Ankong Fang is the founder and chairman of Chiho-Tiande; the 18% stake Sims purchased came mostly from interests associated with him.

The article notes Sims has been a large supplier of material to Chiho-Tiande for some time, so taking an equity stake could further align the two companies’ commercial interests and formalise a longstanding supply relationship.