Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. (SHSE:600116) signed a reorganization intention agreement to acquire 88.4% stake in Chongqing Changdian United Energy Co., Ltd. and 100% stake in Chongqing Liangjiang Changxing Electric Power Co., Ltd. from a group of sellers on March 8, 2019. Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. intends to issue shares and convertible corporate bonds and to pay in cash (if necessary). The consideration for 100% stake in Chongqing Liangjiang Changxing Electric Power Co., Ltd. comprises issuance of 844.2 million shares of Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. for a total of CNY 6.2 billion. As of September 23, 2019, the consideration was revised and the issuance price of the shares was CNY 7.32 per share. Chongqing Three Gorges Water Conservancy and Electric Power will pay CNY 307.83 million in cash and issue 712.72 million shares for Chongqing Changdian United Energy Co., Ltd. CNY 56.78 million in cash and issue 131.45 million shares for Chongqing Liangjiang Changxing Electric Power. As on December 23, 2019, Yang Jun entered into cancellation agreement with Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd to withdraw from the transaction and no longer participate in the transaction with the 0.14% equity interest in Chongqing Yangtze Power United Energy. Upon the withdrawal of Yang Jun from the transaction, the number of share issued changed to 843 million and total consideration of Chongqing Yangtze Power United Energy changes to CNY 5.5 billion. As of May 19, 2020, the consideration was revised and the issuance price of the shares was CNY 7.22 per share. Issuance amount will thus be adjusted from 843.03 million shares to 854.70 million shares. Accordingly, Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. will acquire the stake in Chongqing Yangtze Power United Energy and Chongqing Liangjiang Changxing Electric Power for CNY 7.8 billion. Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. intends to issue shares to no more than 10 specific investors to raise supporting funds of not more than CNY 500 million.

The transaction is subject to approval of State-owned Assets Supervision and Administration Commission of the State Council, Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. shareholders' meeting review and approval, Anti-monopoly review of concentration of business operators by the State Administration for Market Regulation and China Securities Regulatory Commission (CSRC) approval. As on April 20, 2019, the transaction was approved by the Board of Directors and supervisors of Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. The transaction was also approved by the internal decision-making bodies of the transaction counterparties. State-owned Assets Supervision and Administration Commission of the State Council agreed in principle to the transaction on October 15, 2019. On November 12, 2019, Chongqing Three Gorges Water Conservancy and Electric Power Co received the antitrust review of no implementation of further review from the State Administration for Market Regulation. As on December 12, 2019, the shareholders of Chongqing Three Gorges Water Conservancy have approved the transaction. On December 26, 2019, CSRC's M&A Reorganization Review Committee did not approve the proposal. On April 15, 2020, the transaction was conditionally passed by CSRC Listed Company M&A and Reorganization Review Committee. As of April 15, 2020, Chongqing Three Gorges Water Conservancy and Electric Power Co has not received the official approval document issued by CSRC. On May 9, 2020, Chongqing Three Gorges Water Conservancy and Electric Power Co received the reply on the approval of the acquisition issued by CSRC.

Wang Du, Zhang Jian, Wu Hao, Duan Lian, Liu Qingyun, Zhang Tingting, Liao Jun, Zhang Han, Liu Jiaqi, Han Feichong of Huatai United Securities Co., Ltd. and Yang Weiwei, Feng Xinzheng, Wang Nannan, Qiu Yue, Chen Ting, Meng Xianyu, Wang Hao, Zhao Xianyao, Sun Shaoheng of CITIC Securities Company Limited acted as independent financial advisors to Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. Wang Wei and Liu Tianqi of Zhong Yin Law Firm acted as a legal advisor and Li Hongyi and Yang Weiguo of Moore Stephens Da Huato acted as an accountant to Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd.

Chongqing Three Gorges Water Conservancy and Electric Power Co., Ltd. (SHSE:600116) completed the acquisition of 88.4% stake in Chongqing Changdian United Energy Co., Ltd. and 100% stake in Chongqing Liangjiang Changxing Electric Power Co., Ltd. from a group of sellers on May 21, 2020.