(Yicai Global) June 30 -- Chinese aluminum materials processor Dingsheng New Materials will spend EUR56.3 million (USD61.2 million) to buy Italian peer Slim Aluminum to expand its battery aluminum foil business in Europe.

Dingsheng will acquire Slim Aluminum, including its production base in Italy and one in Germany, from owners Rolling Mills International Holding and Rolling Mills International, it said late yesterday. The two plants have a total output capacity of about 135,000 tons of aluminum materials, including sheets and foils.

Once the acquisition is completed, Dingsheng’s business in Europe will cover the whole aluminum processing product spectrum, from hot and cold rolling to foil rolling, the Jiangsu province-based company said.

The deal will help the firm increase its market share of aluminum products in Europe while ensuring the stable supply of raw materials for its aluminum foil plant in Italy and improve its overall business, as Slim Aluminum has advanced production and supporting facilities, premium customer resources, and high gross margin, it noted.

In recent years, Dingsheng has been actively converting its factories to produce more battery aluminum foil. Since the beginning of the year, it has signed long-term supply deals with global battery giants Contemporary Amperex Technology, LG Energy Solution, and SK On.

In March, Dingsheng agreed to supply CATL with more than half of the aluminum foil the Ningde-based firm needs in China. Meanwhile, Dingsheng’s facility in Italy will provide products to CATL’s European plants between next year and 2026.

Dingsheng’s shares [SHA: 603876] closed up 1.3 percent at CNY19.19 (USD2.65) apiece in Shanghai today. The stock is down 16 percent this year.

Editor: Futura Costaglione