China Shengmu Organic Milk Limited (SEHK:1432) and Inner Mongolia Shengmu High-tech Farming Co., Ltd. entered into a framework agreement to acquire Inner Mongolia Shengmu Sand and Grass Industry Co., Ltd. from a group of shareholders for approximately HKD 570 million on December 21, 2018. As part of consideration, China Shengmu Organic Milk will issue 688.7 million shares by acquiring 40% stake and Inner Mongolia Shengmu High-tech Farming will acquire 60% stake for HKD 340 million (CNY 300 million). Inner Mongolia Shengmu High-tech Farming shall pay cash consideration by installments upon fulfillment of all the conditions precedent before November 30, 2019. If all the conditions precedent are fulfilled before February 28, 2019, Inner Mongolia Shengmu High-tech Farming shall pay the consideration from March 2019. On March 8, 2019, Inner Mongolia Shengmu High-tech Farming and 12 individual sellers entered into a supplemental agreement pursuant to which if all the conditions precedent are fulfilled before March 31, 2019, Inner Mongolia Shengmu High-tech Farming shall pay the consideration from March 2019 in a total of 9 installments. Upon completion, Inner Mongolia Shengmu Sand and Grass Industry will become indirect wholly owned subsidiary of China Shengmu Organic Milk Limited. On December 25, 2019, Inner Mongolia Shengmu High-tech Farming and 12 individual sellers entered into a second supplemental agreement pursuant to which 60% stake in Inner Mongolia Shengmu Sand and Grass Industry will be transferred within 10 days from December 25, 2019. China Shengmu Organic Milk will complete the issuance of shares of consideration before June 30, 2020. Transaction is subject to approval by the Board of Directors and shareholders’ general meeting of China Shengmu Organic Milk and regulatory approvals. As of January 6, 2019, Board of China Shengmu Organic Milk approved the deal. As of January 24, 2019, the shareholders of China Shengmu Organic Milk have approved deal. As of March 28, 2019, shareholders of China Shengmu Organic Milk approved the transaction. The independent Board committee, comprising all the independent non-executive Directors, has been established to advise the independent shareholders on the transaction. The transaction is expected to be completed by June 30, 2020. Somerley Capital Limited acted as financial adviser for independent Board committee and independent shareholders in the transaction. Tricor Investor Services Limited, the Hong Kong branch acted as share registrar to China Shengmu Organic Milk Limited. Kay Ian Ng and Gwen Wong of Sullivan & Cromwell LLP acted as legal advisors to China Shengmu Organic Milk Limited. China Shengmu Organic Milk Limited (SEHK:1432) and Inner Mongolia Shengmu High-tech Farming Co., Ltd. completed the acquisition of Inner Mongolia Shengmu Sand and Grass Industry Co., Ltd. from a group of shareholders on May 29, 2020.