Chinese-Backed Buyout Firm Nears Deal to Buy German Rayon Maker

(Bloomberg) -- BMC Europe, a private equity firm backed by Shanghai’s government, acquired German rayon producer Cordenka GmbH in a deal that underscores the interest in forging investment ties between China and Europe.

The deal values the company, sold by Chequers Capital, at about 240 million euros ($272 million), according to a statement on Thursday. Goldman Sachs Group Inc. and Barings provided financing for the transaction, which already has German and Chinese regulatory approval.

The deal marks the first acquisition by BMC, which began operations in February during British Prime Minister Theresa May’s visit to Shanghai. The buyout firm has raised about 3 billion yuan ($433 million) for its initial fund as it seeks to tap into Xi Jinping’s Belt and Road Initiative to build investment and trade links with countries along the old Silk Road to Europe.

The firm, backed by state-owned investment company Shanghai International Group, plans to help private capital from China tap mid-sized European manufacturers for their technical expertise while opening up the Chinese market to European companies.

BMC was co-founded by three former Credit Suisse Group AG bankers including Xinya Vivian Wang, the Shanghai representative for the Swiss lender, and Sebastian Grigg, former head of U.K. investment banking, as well as London-based executive Jialu Wang. On the deal, the firm was backed by a group of local Chinese institutions including Shanghai Electric Group and a unit of Agricultural Bank of China Ltd.

The co-founders said in the statement they’ve developed a plan to provide Cordenka with growth opportunities through their network and access in Shanghai. The manufacturer, founded in 1938 in Obernburg, supplies rayon to makers of tires used in Aston Martin, BMW and Tesla cars. The company employs about 650 people.

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