XCMG Construction Machinery Co., Ltd. (SZSE:000425) agreed to acquire XCMG Engineering Machinery Co. Ltd. from group of sellers for CNY 38.7 billion on April 21, 2021. As per terms of transaction, In order to protect the interests of the dissenting shareholders of the listed XCMG Construction Machinery Co., Ltd. the cash option provider will provide the dissenting shareholders of the listed XCMG Construction Machinery Co., Ltd. with the cash option during the merger process. The dissenting shareholders who have the right to exercise the cash option can make a request to the cash option provider to acquire their shares in the listed XCMG Construction Machinery Co., Ltd. The exercise price of the cash option is CNY 5.65 per share. The XCMG Construction Machinery Co., Ltd. is the merging party, the XCMG Engineering Machinery Co. Ltd. is the party to be merged. After the merger, the XCMG Construction Machinery Co., Ltd. as the surviving XCMG Construction Machinery Co., Ltd. will take over all assets, liabilities, businesses, employees and other rights and obligations of the XCMG Engineering Machinery Co. Ltd. The XCMG Engineering Machinery Co. Ltd.'s legal entity will cease to exist. The shares in the XCMG Construction Machinery Co., Ltd. held by the XCMG Engineering Machinery Co. Ltd. prior to this transaction will be cancelled. After the transaction, the 2.9 billion shares in the XCMG Construction Machinery Co., Ltd. held by the XCMG Engineering Machinery Co. Ltd. will be cancelled. As of November 6, 2021, the consideration of CNY 387 billion will be paid by XCMG Construction Machinery through shares at CNY 5.55 per share by issuing 6,970,483,397 shares.

For the year ending on June 30, 2021, XCMG Engineering Machinery reported Total assets of CNY 169.0371142 billion and owners' equity of CNY 29.8474293 billion. The transaction is subject to approval of State-owned Assets Supervision and Administration Commission of Jiangsu Province, China Securities Regulatory Commission, and shareholders of XCMG Construction. The anti-monopoly department has passed the review of the concentration of business operators involved in this transaction. The transaction was approved at the 43rd meeting of the 8th Board of Directors of the XCMG Construction. As of November 8, 2021, State-owned Assets Supervision and Administration Commission of Jiangsu Province approved the transaction. As of May 27, 2022, the China Securities Regulatory Commission approved the transaction conditionally. As of July 8, 2022, XCMG Construction received CSRC's Approval, which is valid for 12 months.

Zhang Youjun, Gao Shibo, Sihan, Yang Jun, Xie Yuhao, Hu Yunzhi, Feng Ziqiang, Wang Xiangcheng, Jiang Haina, Qi Zeyu, Jin Yipan, Yang Weihao, Cheng Yachen and Zou Jianhui of CITIC Securities Co., Ltd. and Jiang Yu, Liao Jun, Zuo Di, Jiang Haiyang, Luan Hongfei, Li Kai, Chen Zi, Zhu Feng, Li Anqi, Liu Xue, Ji Yudao, Zheng Zhe, Lian Ke, Pan Peixian and Lei Chenxi of Huatai United Securities Co., Ltd. acted as financial and fairness opinion provider of XCMG Construction. Gu Gongyun, Dong Junnan, Bu Ping and Lu Weiwen of AllBright Law Offices acted as legal adviser of XCMG Construction. Jiangsu Talent CPA Co., Ltd. acted as accountant to XCMG Engineering Machinery.