(Yicai) March 4 -- Shares of Yankuang Energy Group rose after the Chinese coal miner said it plans to improve its global market growth prospects by buying a controlling stake in an underground mining equipment maker in Germany for around EUR32.2 million (USD34.9 million).

Yankuang Energy [SHA: 600188] closed 4 percent higher at CNY27.03 (USD3.79) a share in Shanghai today. Its Honk Kong-traded stock [HKG: 1171] jumped 4 percent to HKD19.20 (USD2.45) as of 3.10 p.m.

Yankuang Energy will offer EUR11.10 (USD12.04) a share to buy a nearly 53 percent stake in SMT Scharf, the Jining-based firm said late on March 1, citing a deal inked on the same day with the target company's 10 shareholders, including Shareholder Value Management Aktiengesellschaft.

Established in 1941, SMT Scharf first went public on the Frankfurt Stock Exchange before moving to the Börse Münche in 2021, Yankuang Energy noted. After the acquisition, the parties involved have agreed for the Chinese firm to try to return SMT Scharf to the Frankfurt bourse.

The acquisition is to assist the expansion of Yankuang Energy's mining equipment business, enabling the company to manufacture various equipment independently, including that used in underground mining and auxiliary transport devices, and lower equipment purchasing costs, it noted.

The deal will also allow Yankuang Energy to fully utilize SMT Scharf's service networks in several countries and further its relevant businesses' international market positioning, it added.

SMT Scharf supplies auxiliary transport equipment applied in underground mining, Yankuang Energy said. Due to declining market demand for its products, the firm swung into the red and saw a decline in revenue in the nine months ended Sept. 30 from a year earlier. Its unaudited third-quarter net profit was EUR4.8 million (USD5.2 million), while such revenue stood at EUR54.1 million.

The deal is still subject to various reviews by regulators in countries including China, Germany, Canada, Russia, South Africa, and Poland, Yankuang Energy noted, adding that it must also be agreed upon or exempted by SMT Scharf's creditors and related third parties.

Editor: Martin Kadiev