Shanxi Zhendong Pharmaceutical Co.,Ltd (SZSE:300158) agreed to acquire Beijing Kangyuan Pharmaceutical Co., Ltd. from Li Xun, Ma Yunbo, Li Xihai, Nie Hua, Li Dong, Cao Zhigang, Wang Li, Shanghai Jinglin Jingxi Investment Center (Limited Partnership) and Shanghai Jinglin Jingtu Investment Center (Limited Partnership) for CNY 2.6 billion in cash and stock on September 7, 2015. Shanxi Zhendong Pharmaceutical Co.,Ltd will fund the cash consideration of the acquisition via the supporting funds of not more than CNY 1.198 billion raised in the private placement. As consideration, Shanxi Zhendong Pharmaceutical will pay CNY 629.18 million in cash and will issue 141.23 million shares at CNY 14.28 per share. Beijing Kangyuan Pharmaceutical Co., Ltd. reported total assets of CNY 187.93 million, total owner's equity of CNY 141.27 million, revenue of CNY 264.06 million, operating profit of CNY 96.79 million and net profit of CNY 82.26 million for the year ending December 31, 2014. The transaction is subject to the approval from the shareholders of Shanxi Zhendong Pharmaceutical and approval from the China Securities Regulatory Commission. The shareholders of Beijing Kangyuan Pharmaceutical Co., Ltd. approved the deal with Shanxi Zhendong Pharmaceutical Co.,Ltd on September 7, 2015. The transaction was approved by the Board of Shanxi Zhendong Pharmaceutical on October 21, 2015. On November 23, 2015, the shareholders of Shanxi Zhendong Pharmaceutical Co., Ltd. approved the transaction. On April 18, 2016, China Securities Regulatory Commission issued written approval approving the transaction. On February 25, 2016, the Merger, Acquisition, and Reorganization Examination Committee of Listed Companies of the China Securities Regulatory Commission approved the transaction. BDO China SHU LUN PAN Certified Public Accountants LLP and CHW CPA Limited Liability Partnership acted as accountants for Shanxi Zhendong Pharmaceutical Co.,Ltd. Shenwan Hongyuan Securities Underwriting Sponsor Co., Ltd. acted as financial advisor, King & Wood Mallesons, China acted as legal advisor.

Shanxi Zhendong Pharmaceutical Co.,Ltd (SZSE:300158) completed the acquisition of Beijing Kangyuan Pharmaceutical Co., Ltd. from Li Xun, Ma Yunbo, Li Xihai, Nie Hua, Li Dong, Cao Zhigang, Wang Li, Shanghai Jinglin Jingxi Investment Center (Limited Partnership) and Shanghai Jinglin Jingtu Investment Center (Limited Partnership) on May 13, 2016..