Yunnan Chuangxin New Material Co., Ltd. (SZSE:002812) agreed to acquire Shanghai Energy New Materials Technology Co., Ltd. from a group of shareholders for CNY 5.5 billion on May 2, 2017. As per terms, 389.2 million shares will be acquired and 107.6 million shares of Yunnan Chuangxin New Material Co., Ltd. will be issued as consideration. On June 19, 2017, the deal terms revised and Yunnan Chuangxin New Material Co., Ltd. will now acquire Shanghai Energy New Materials Technology Co., Ltd. for CNY 10.7 billion. Yunnan Chuangxin New Material Co., Ltd. will now issue 109.2 million shares. On February 13, 2018, the deal terms were revised. As per the revised terms, the consideration for 93.33% stake to be acquired from a group of 22 sellers will be satisfied by issuance of 101.9 million shares. On April 17, 2018, Yunnan Chuangxin New Material decided to issue 208.27 million shares to the sellers as consideration. On July 20, a termination agreement was signed whereby Yunnan Chuangxin New Material Co., Ltd.’s acquisition of Shanghai Energy New Materials Technology Co., Ltd.’s 3.25% stake from Yan Ma was terminated. Yunnan Chuangxin New Material Co., Ltd. will now acquire Shanghai Energy New Materials Technology Co., Ltd.’s 90.08% stake by issuing 201 million shares. In a related transaction, Yunnan Chuangxin New Material Co., Ltd. announced a private placement of CNY 800 million. For the year ended December 31, 2016, Shanghai Energy New Materials Technology Co., Ltd. reported revenues of CNY 499 million, operating profit of CNY 230.8 million and net profit of CNY 199.6 million. As of December 31, 2016, Shanghai Energy New Materials Technology Co., Ltd. reported total assets of CNY 1.6 billion and net assets of CNY 1.4 billion. On May 2, 2017, the Board of Yunnan Chuangxin New Material Co., Ltd. approved the transaction. On June 12, 2017, the shareholders of Yunnan Chuangxin New Material Co., Ltd. approved the transaction. The transaction is approved by China Securities Regulatory Commission. The termination agreement was approved by the Board of Yunnan Chuangxin New Material Co., Ltd. on July 20, 2018. Zhang Junguo and Jin Rui of China Merchants Securities Co.,Ltd. acted as financial advisors, Gao Shimao and Ma Biyu of Moore Stephens Da Hua acted as accountants and Li Chen and Pan Jiangting of Grandall Law Firm acted as legal advisors to Yunnan Chuangxin New Material.