By Xiao Wan (China Daily)
Updated: 2007-07-12 14:13

The China Securities Regulatory Commission has approved a 51 percent stake sale of Wuhan Boiler to Alstom for 338.9 million yuan.

Alstom, French power and transportation equipment maker, will purchase 151.47 million shares from Wuhan Boiler's parent Wuhan Boiler Group, the Chinese firm said in a statement.

After the deal, Wuhan Boiler Group will retain a 6.91 percent stake in the listed Wuhan Boiler.

Wuhan Boiler makes boiler systems for the power industry.

The deal was earlier approved by the Ministry of Commerce and the State-owned Assets Supervision and Administration Commission, Shenzhen-listed Wuhan Boiler said in the statement.

According to French newspaper Les Echos, Alstom will make Wuhan Boiler a base for global exports. Wuhan Boiler will eventually export a third of its output from a factory Alstom plans to modernize, said the newspaper.

Alstom earlier said it will introduce new technology and improve management to boost Wuhan Boiler.

Active in China's power industry, Alstom last year opened Alstom Beizhong Power Co Ltd, a joint venture with Beijing Heavy Electric Machinery Works. The company aims to build the joint venture into one of its most important global manufacturing centers for power generator equipment.

The joint venture has so far delivered power equipment to major domestic power companies such as China Guodian Corp and China Power Investment Corp.

Analysts said the Wuhan Boiler deal underlines foreign investors' interest in the machinery sector in general, best illustrated by Carlyle Group's attempts to acquire Xugong Group Construction Machinery Co Ltd.