Hygon Information Technology Co., Ltd. (SHSE:688041) signed a letter of intent to acquire Dawning Information Industry Co., Ltd. (SHSE:603019) for approximately CNY 110 billion on May 25, 2025. The consideration consists of issuing A shares to all A share shareholders of the Company in exchange for shares, while also issuing A shares to raise supporting funds. The A shares of Dawning Information Industry Co., Ltd. will be suspended from trading starting from the opening of the market on May 26, 2025. Under the terms, Each one of Dawning's shares will be converted into 0.55 shares of Hygon at a price of CNY79.26 (USD11.03) and CNY143.46 (USD19.96), respectively. Once the merger is completed, Dawning will be delisted. Transaction has been approved by Hygon Information Technology's board of directors. Transaction has been approved by Dawning Information Industry's board of directors. This transaction has been approved by the Institute of Computing Technology of the Chinese Academy of Sciences. The supporting funds raised for this transaction are intended to be used, after deducting intermediary fees, for paying taxes and fees related to this acquisition, merger and integration costs such as personnel placement expenses, supplementing working capital, repaying debts, and investing in project construction.
The transaction still requires the completion of necessary internal decision-making procedures and approval from the competent regulatory authorities before it can be formally implemented, and there remains uncertainty regarding its implementation. The transaction plan must be reviewed and approved by the shareholders' meetings of the Company and Dawning Information Industry Co., Ltd.