Managing China’s asset price inflation
- From: Vol 8, Issue 3 (March 2007)
- Category: General
- Region: Asia
- Country: China
- Related Companies: Beijing Capital Group, Changzhou Water Company, Haikou Water Supply Group, Shenzhen Water Group and Veolia Water
Veolia’s deal to acquire 45% of the Lanzhou water group involved a premium of 280% over the asset value – the largest ever paid in the Chinese water sector. GWI China editor Kathy Liu explains how such deals can work.
The price of water and wastewater utility assets appears to be rising at an alarming rate. Veolia Water’s recent 30-year water supply concession at Lanzhou involved paying RMB1.71 billion ($220 million) for 45% of a company with total assets of RMB916 million ($118 million).
This follows a number of other deals in which large premia have been paid ...
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