(Yicai) Nov. 2 -- Shares of Huaxin Building Materials Group surged by their daily trading limit after the leading Chinese cement supplier said it had penned a deal with Brazilian steel giant Companhia Siderúrgica Nacional, granting it exclusive negotiation rights to acquire its unit CSN Cimentos Brasil.

Huaxin [SHA: 600801] closed up 10 percent at CNY23.54 (USD3.53) a share in Shanghai today. Its Hong Kong-listed stock [HKG: 6655] also ended 10 percent higher at HKD16.24 (USD2.07).

Huaxin and CSN will negotiate the sale of CSN Cimentos, valued at BRL12.7 billion (USD2.3 billion), for 10 days from the agreement’s signing date on Oct. 30, the Wuhan-based company announced the same day. The deal is still under negotiation, so it may or may not proceed, it pointed out.

Acquiring CSN Cimentos could help Huaxin optimize its global production footprint and boost its market share of the cement business and core competitiveness in South America, the company said, adding that any acquisition deal would be subject to approval by Chinese and Brazilian regulators.

CSN Cimentos has grown into Brazil's second-largest cement producer through a series of acquisitions and plans building in recent years. With an annual production capacity of 16.3 million tons, it has a distributed network across the South American country, according to its website.

This marks Huaxin’s second major asset acquisition in Brazil. In March last year, the company completed buying Embu S.A. Engenharia e Comercio, a leading supplier of building aggregates in São Paulo. Cement and aggregates are the two main raw materials for making building concrete.

Huaxin, whose largest shareholder is a subsidiary of Swiss Holcim, sold 34.79 million tons of cement and commercial clinker in the first half, including 13.18 million tons overseas, according to its first-half financial report. It has cement businesses in 14 countries outside China, mainly in Africa and Central Asia.

Thanks to the increase in overseas production capacity and stable profitability of its aggregate integration business, Huaxin expects third-quarter net profit to have jumped 24 percent to CNY1.1 billion (USD165.1 million) from a year earlier, while revenue likely rose 13 percent to CNY10.2 billion (USD1.5 billion), according to its quarterly report also released on Oct. 30.

For the first three quarters of this year, profit likely surged 41 percent to CNY2.8 billion and revenue probably grew 19 percent to CNY29.7 billion from a year ago. Huaxin plans a third-quarter cash dividend of CNY5 (75 US cents) for every 10 shares held.

 Editors: Tang Shihua, Martin Kadiev