Hunan Jiangnan Red Arrow Co., Ltd. (SZSE:000519) agreed to acquire Zhengzhou Hongyu Special Automobile Co.,Ltd. from Yuxi Industrial Group Co., Ltd. for approximately CNY 140 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. 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 Henan Beifang Hongyang Industrial Machinery 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. Zhengzhou Hongyu Special Automobile reported total assets of CNY 171.03 million, shareholders’ equity of CNY 88.44 million, operating revenues of CNY 502.69 million, operating profit of CNY 7.04 million and net profit of CNY 7.65 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. As of July 1, 2016, the number of shares to be issued as consideration has been amended to 11.5 million. Hunan Jiangnan Red Arrow will now raise gross proceeds of maximum CNY 2 billion to fund the transaction. Citic Securities Co., Ltd. acted as independent financial advisor for Hunan Jiangnan Red Arrow Co., Ltd. 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) completed the acquisition of Zhengzhou Hongyu Special Automobile Co.,Ltd. from Yuxi Industrial Group Co., Ltd. on December 21, 2016. The transaction was approved by the Ministry of Commerce of the People’s Republic of China Anti-Monopoly Bureau, CSRC.