The Compagnie Generale Des Eaux (CGE) of France signed a contract with a Chinese water company in a boomtown bordering Hong Kong, to acquire 45% of its shares for US$ 400m.
This deal marks China's largest mer-ger and acquisition this year by a foreign company, and the country's biggest deal in the water supply industry, said Huang Chuanqi, chairman of the board of the Shenzhen Water Supply Group, which sold the shares. CGE will directly own five percent of Shenzhen Water Supply's shares, while the other 40% will be held by CGE's joint venture with a Beijing-based company, the Beijing Capital VW Investment Co. Ltd.
China has begun to gradually open access to its public facilities to foreign investors, following its entry into the World Trade Organization in 2001, with water supply being one investment focus.
The Shenzhen Water Supply Group is a state-owned enterprise that supplies water and provides sewage
treatment for more than two million people in the city.
