Shenzhen Expressway Company Limited (SEHK:548) entered into a memorandum of understanding to acquire 71.83% stake in Shenzhen Investment Holdings Bay Area Development Company Limited (SEHK:737) from Shenzhen Investment Holdings Co., Ltd. on March 15, 2021. Mei Wah Industrial (Hong Kong) Limited entered into the Sale and Purchase Agreement to acquire 71.83% stake in Shenzhen Investment Holdings Bay Area Development Company Limited from Shenzhen Investment Holdings Co., Ltd. for HKD 2.5 billion on August 10, 2021. Under the MOU, Shenzhen Expressway Company will acquire 2.2 billion shares in Shenzhen Investment Holdings Bay Area Development Company Limited and will pay an earnest amount of HKD 10 million. Parties have also entered into the Payment Obligation Arrangement. Out of total consideration, amount payable amounting to HKD 2.5 billion, the outstanding amount of the debts amounting to approximately HKD 7.9 billion and the Contingent Consideration, which is estimated to be no more than approximately HKD 139 million. After deducting approximately HKD 151 million cash and receivables, the price per Shenzhen Investment Holdings Bay Area Development Company Limited share is estimated to be no more than HKD 4.67. Within 5 Business Days from the date of the signing of agreement, Mei Wah will pay HKD 725 million and HKD 1.7 billion to be paid on completion. Mei Wah will also pay a loan of HKD 5.5 million provided to Shenzhen Investment Holdings Bay Area Development Company Limited by Shenzhen Investment Holdings Co., Ltd. Mei Wah will pay Third Party Loans in the principal amount of HKD 2.44 billion. The Possible Transaction is subject to further negotiation and execution of a formal sale and purchase agreement between the parties. The MOU shall be terminated (i) upon the signing of the formal sale and purchase agreement or (ii) upon mutual agreement to terminate in writing or (iii) upon expiry of the Exclusivity Period (whichever occurs first), in which case, the Earnest Money shall be refunded to the Purchaser. In the event of any breach of the MOU by the Purchaser, the Vendor may forfeit the Earnest Money or in the event of any breach of the MOU by the Vendor, the Purchaser may require the Potential Vendor to pay back twice the amount of the Earnest Money. On April 13, 2021, Capable (Hong Kong) Industries LTD, a wholly-owned subsidiary of Shenzhen Expressway Company Limited (SEHK:548), has been exempted by the executives of the Hong Kong Securities Regulatory Commission from the mandatory general offer obligation to Bay Area Development due to the transfer of the rights and interests of Bay Area Development. The transaction is approved at the seventh meeting of the Ninth Board of Directors of Shenzhen Expressway Co., Ltd. on July 22, 2021. Transaction is subject to the fulfilment of certain conditions precedent including among others, approval by the independent shareholders of each of Shenzhen Investment Holdings Co., Ltd., Shenzhen Expressway and its parent, Shenzhen International Holdings Limited, at their respective general meeting. Conditions shall be satisfied on or before December 31, 2021. Shenzhen Expressway Independent Board Committee comprising all the independent non-executive directors of Shenzhen Expressway has been formed to advise Shenzhen Expressway Independent Shareholders in respect of the Sale and Purchase Agreement, Payment Obligation Agreement. Shenzhen International Independent Board Committee comprising all the independent non-executive directors of Shenzhen International has been formed to advise Shenzhen International Independent Shareholders in respect of the Sale and Purchase Agreement, Payment Obligation Agreement. As of December 10, 2021, transaction has been approved by the shareholders of Shenzhen Expressway Company Limited and Shenzhen International Holdings Limited. China Merchants Securities Co., Ltd. (SHSE:600999) acted as financial advisor to Shenzhen Expressway.