Dongguan Mentech Optical & Magnetic Co., Ltd. (SZSE:002902) agreed to acquire a remaining 95.6% stake in Chengdu Kelai Microwave Technology Co., Ltd. from a group of shareholders for CNY 650 million on January 21, 2020. Dongguan Mentech Optical & Magnetic Co., Ltd. signed a supplement agreement to acquire 95.22% stake in Chengdu Kelai Microwave Technology Co., Ltd. from a group of shareholders for approximately CNY 550 million on May 18, 2020. Under the terms of the transaction, Dongguan Mentech Optical & Magnetic Co., Ltd. intends to pay 30% in cash and 70% in shares but the final deal value, payment ratio and payment amount of this transaction, and the payment ratio and payment amount of each counterparty will be disclosed in the restructuring report, while the transaction amount is tentatively set at CNY 650 million and the final transaction amount will be determined through consultation and evaluation by Chengdu Kelai Microwave Technology Co., Ltd. Under the revised term of the supplement agreement, Dongguan Mentech Optical & Magnetic Co., Ltd will pay 19.44 million share at CNY 21.53 per share and CNY 179.4 million in cash. Dongguan Mentech Optical & Magnetic Co., Ltd. raised CNY 430 million to finance the transaction from multiple investors. As per the revised term, Dongguan Mentech Optical & Magnetic Co., Ltd. will raise not more than CNY 396.8 million to finance the transaction. The shares cannot be transferred within 6 months from the issuance closing date. As of December 31, 2019, Chengdu Kelai Microwave Technology reported total assets of CNY 158.28 million, net assets of CNY 64.87 million, revenue of CNY 97.43 million, EBIT of CNY 28.97 million and net profit of CNY 25.15 million. The transaction required approval from CSRC, shareholders and Board approval from Dongguan Mentech Optical & Magnetic Co., Ltd. and shareholder approval of Chengdu Kelai Microwave Technology Co., Ltd. as well. The transaction was approved by the board of directors of Dongguan Mentech Optical & Magnetic Co., Ltd at the 25th meeting of the 3rd directorate held on May 18, 2020. The transaction was approved by the Chengdu Kelai Microwave Technology Co., Ltd's shareholder on May 18, 2020. On June 10, 2020, Dongguan Mentech Optical & Magnetic Co., Ltd. held the first extraordinary general meeting of shareholders in 2020 and passed the proposal. On September 2, 2020, Dongguan Mentech Optical & Magnetic Co., Ltd. held the 29th meeting of the third Board of Directors, at which the revised transaction proposal was reviewed and approved. On September 17, 2020, the Merger, Acquisition and Reorganization Examination Committee held its 41st working meeting for 2020, reviewed the company’s acquisition of asset through share issuance and cash payment and raising of supporting funds transaction. Based on the review results, the company’s acquisition of asset through share issuance and cash payment and raising of supporting funds transaction was not approved. Dongguan Mentech Optical & Magnetic held its Board meeting on November 30, 2020 and announced terminating the issuance of shares and paying cash to purchase assets and private placement for the raising of supporting funds. Zhang Wen, Zhang Hongbin, Cui Wei, Ye Zheng, Zhang Shuang, Wu Yuhan and Xiong Tianhao of Guosen Securities Co., Ltd. (SZSE:002736) acted as a financial advisor, Fang Xiaozhong, Li Wei and Li Hang of Grandway Law Offices acted as a legal advisor and Zheng Jianli and Yu Wenyou of Grant Thornton China acted as an accountant to Dongguan Mentech Optical & Magnetic Co., Ltd.