KUALA LUMPUR (Feb 15): Wah Seong Corp Bhd has acquired a Germany-based pipe coating firm, mutares Holding-16 AG, for €19.5 million (RM91.5 million), to gain access to the latter's plant for pipe coating for the Nord Stream 2 Project in the Baltic Sea.

The purchase was done by Wah Seong's indirect wholly-owned unit Wasco Coatings Germany GmbH, which inked the sale and purchase agreement with mutares AG, the parent of mutares Holding-16, on Tuesday.

mutares Holding-16 owns Eupec PipelineServices GmbH, which provides pipe coating for construction sites, isolation of pipe welds of coated pipes, and is involved in the trading of pipeline commodities and insulating materials.

Wah Seong said the purchase was completed on the same day the agreement was inked, and that it was funded via a project financing scheme.

"The acquisition will enable Wasco Coatings Germany to use the existing plant and machinery in Mukran, Germany, to perform its pipe coating activities for the purposes of the Nord Stream 2 Project," Wah Seong said in a stock exchange filing this evening.

Wah Seong's wholly-owned indirect unit, Wasco Coatings Europe BV, secured the contract to provide concrete weight coating and storing of pipes for the Nord Stream 2 Project last September for a contract value of about €600 million (RM2.8 billion).

Nord Stream 2 is a planned pipeline through the Baltic Sea, which will transport natural gas over 1,200km, from southwest of St Petersburg — a Russian port city on the Baltic Sea — and ending at German coast, Greifswald.

"The acquisition is expected to have a positive effect on Wah Seong's earnings for the financial year ending Dec 31, 2017," the company said.

Wah Seong's stock closed at 88 sen today, with 2.54 million shares traded, giving it a market capitalisation of RM680.07 million.