Hunan Jiangnan Red Arrow Co., Ltd. (SZSE:000519) agreed to acquire Henan Beifang Hongyang Industrial Machinery Co., Ltd. from Yuxi Industrial Group Co., Ltd. for approximately CNY 410 million in cash and stock on December 12, 2015. Hunan Jiangnan Red Arrow will issue shares to pay 85% of the transaction price at CNY 12.10 per share and 15% of the transaction price shall be paid in cash. As on July 1, 2016 deal terms revised. 35.1 million Shares will be issued at additional to the cash. In related transactions, Hunan Jiangnan Red Arrow Co., Ltd. agreed to acquire Nanyang Beifang Xiangdong Industrial Co., Ltd., Nanyang Beifang Hongyu Electromechanical Manufacturing Co., Ltd. and Zhengzhou Hongyu Special Automobile Co., Ltd. from Yuxi Industrial Group Co., Ltd.; agreed to acquire Shandong Beifang Binhai Machinery Co., Ltd. from Shandong Special Industry Group Co., Ltd.; and agreed to acquire Jilin Jiangji Special Industry Co., Ltd. from Jilin Jiangbei Machinery Manufacture Co., Ltd. on December 12, 2015. Hunan Jiangnan Red Arrow will also raise gross proceeds of maximum CNY 2.4 billion to fund the cash consideration by issuing shares to not more than 10 specific investors. As on July 1, 2016 the financing is revised and total proceeds of CNY 2.1 billion will be issued to finance the transaction. Henan Beifang Hongyang Industrial Machinery reported total assets of CNY 586.02 million, shareholders’ equity of CNY 117.14 million, operating revenues of CNY 592.29 million, operating profit of CNY 20.08 million and net profit of CNY 20.96 million as of December 31, 2014. The transaction is subject to approval by the State-owned Assets Supervision and Administration Commission of the State Council and China Securities Regulatory Commission and approval by the shareholders of Hunan Jiangnan Red Arrow. The transaction has been approved by China North Industries Group Corporation’s internal decision-making bodies and State Administration of Science Technology and Industry for National Defense and received in principle approval of the State-owned Assets Supervision and Administration Commission of the State Council. The transaction has been approved by the Board of Directors of Hunan Jiangnan Red Arrow. This transaction was approved by the Ministry of Commerce of the People’s Republic of China Anti-Monopoly Bureau and CSRC. Citic Securities Co., Ltd. acted as independent financial advisor, King & Wood Mallesons acted as legal advisor and Moore Stephens Da Hua Certified Public Accountants acted as accountant for Hunan Jiangnan Red Arrow Co., Ltd. Hunan Jiangnan Red Arrow Co., Ltd. (SZSE:000519) acquired Henan Beifang Hongyang Industrial Machinery Co., Ltd. from Yuxi Industrial Group Co., Ltd. on December 21, 2016.