On the evening of June 9, Ningbo Shanshan Co., Ltd. issued a major asset purchase plan: it plans to acquire 70% equity of the holding company through capital increase at a base purchase price of more than 770 million US dollars, and indirectly purchase LG Chem in mainland China and China. LCD polarizer business and related assets in Taiwan and South Korea.
Shanshan's core business is the research, development, production and sales of lithium battery materials. It is a domestic manufacturer of lithium battery materials that spans the three major cathode, anode and electrolyte, and is one of the largest comprehensive suppliers of lithium battery materials in my country. At present, Shanshan's capacity, technology, customer quality, and market share of lithium battery materials are at the industry-leading level.
The subject of this transaction is the LCD polarizer business and related assets of LG Chem in Mainland China, Taiwan and South Korea, including: (1) 100% equity of Beijing Lejin; (2) Nanjing Polaroid LCD polarizer business; ( 3) Guangzhou Lejin LCD polarizer business; (4) Taiwan Lejin LCD polarizer business; (5) LCD polarizer assets directly held by LG Chem; (6) LCD polarizers directly held by LG Chem Intellectual property.
According to the announcement, this transaction is not a direct acquisition. According to the "Framework Agreement" signed by the listed company with LG Chem, China Lejin Investment, Nanjing Lejin, Guangzhou Lejin, Beijing Lejin, and Taiwan Lejin, LG Chem will be in China Establish a shareholding company (hereinafter referred to as "shareholding company") with cash investment. The listed company obtains 70% of the equity of the holding company in the form of capital increase, and LG Chem holds the remaining 30% of the equity. The funds actually paid by both parties shall be used for the subject of acquisition and integration. The holding company's integration of the transaction subject will be disclosed in the restructuring report. The way of holding shares after the transaction is completed is as follows:
Regarding transaction pricing, Shanshan Co., Ltd. stated that the transaction was a market-based acquisition. After considering various factors such as resource scarcity and the market position of the underlying asset, the listed company and the counterparty of the transaction negotiate on the basis of fairness and reasonableness. And form the benchmark purchase price of this transaction and its adjustment method. In this transaction, the listed company acquired 70% of the equity of the holding company by increasing the capital of the holding company, and indirectly purchased 70% of the equity of the target asset through the holding company. The benchmark purchase price of the underlying asset is $1.1 billion, and the benchmark purchase price for this transaction is $770 million. The final purchase price is adjusted and determined based on factors such as the benchmark purchase price of the transaction subject and normalized working capital, delivery of working capital, delivery of net cash, and deductions for employee turnover compensation.
Regarding the impact of this acquisition on the company's performance, Shanshan said that after the completion of this transaction, Shanshan's asset scale, sales revenue and operating capacity will be further improved, and it will become a leading company in the domestic polarizer industry.
It is reported that my country has become the world's largest and fastest growing LCD market. Benefiting from the rapid development of my country's downstream panel industry, the demand for polarizers, which is one of the core materials of panels, has grown steadily. Through this acquisition, Shanshan Co., Ltd. entered the global LCD polarizer market dominated by only a few companies, and continued to maintain the leading position of LG Chem in the LCD polarizer market, using its key solutions and technologies to expand its market share.