DOMESTIC aluminum products maker Shandong Innovation Metal Technology Co. is set to secure a backdoor stock market listing on the Shanghai Stock Exchange after a supermarket operator announced a US$1.9 billion deal to acquire the firm.

Shanghai-listed Beijing Hualian Hypermarket said in a filing it had signed an agreement to buy all of unlisted Shandong Innovation for 12.1 billion-12.2 billion yuan (US$1.87 billion-US$1.88 billion) by issuing new shares to Shandong Innovation shareholders.

The transaction will allow Shandong Innovation, a major aluminum fabricator based in the city of Zouping, to assume Beijing Hualian’s listing on the Shanghai exchange — and get access to a new fundraising channel — without the need for an initial public offering (IPO).

Zouping is also home to top private-sector aluminum smelter China Hongqiao Group.

Beijing Hualian, which said it intended to dispose of all its existing assets, said competition in the retail industry is “fierce,” with the advent of e-commerce having brought challenges to the supermarkets business.

Meanwhile, the potential for growth in aluminum usage in the automotive sector and solar power is large, it added.

Shandong Innovation, a member of the International Aluminum Institute, did not immediately respond to a request for comment Saturday. (SD-Agencies)