On March 20, Luxi Chemical issued an announcement on “The free transfer of the controlling shareholder’s equity and the proposed change of the actual controller passed the antitrust review in China and South Korea.” The main content of the announcement is as follows:
On December 20, 2019, the State-owned Assets Supervision and Administration Commission of the People’s Government of Liaocheng City, Shandong Province (hereinafter referred to as “Liaocheng State-owned Assets Supervision and Administration Commission” “) and Sinochem Investment (Liaocheng) Co., Ltd. (hereinafter referred to as “Sinochem Liaocheng”) signed the “Equity Transfer Agreement”, stipulating that Liaocheng State-owned Assets Supervision and Administration Commission will transfer its holdings of Luxi Group Co., Ltd. (hereinafter referred to as “Sinochem Liaocheng”) to Sinochem Liaocheng for free. “Luxi Group”) 6.01% equity (hereinafter referred to as “this transfer”). Luxi Group is the direct controlling shareholder of the company. After the transfer is completed, Sinochem Investment Development Co., Ltd. (hereinafter referred to as “Sinochem Investment”) and its concerted parties Sinochem Liaocheng and Liaocheng Juhe Equity Investment Co., Ltd. will indirectly control 33.60% of the company’s shares through Luxi Group shares and achieve control over the company. The actual controller of the company will be changed from the Liaocheng State-owned Assets Supervision and Administration Commission to the State-owned Assets Supervision and Administration Commission of the State Council (hereinafter referred to as the “State-owned Assets Supervision and Administration Commission of the State Council”) to perform the investor’s duties as a wholly state-owned company, China Sinochem Group Co., Ltd. (hereinafter referred to as “Sinochem Group”). The company’s direct controlling shareholder remains unchanged and is still Luxi Group. For details, please refer to the “Informative Announcement of Luxi Chemical Group Co., Ltd. on the Proposed Change of Actual Controller” published by the company on December 21, 2019 (Announcement No.: 2019-066).
Regarding China’s anti-monopoly review involved in this transfer, Sinochem Investment received the “Anti-Monopoly on Concentration of Undertakings” issued by the State Administration for Market Regulation on March 19, 2020. “Review and No Further Review Decision” (Anti-Monopoly Review Decision [2020] No. 103), the State Administration for Market Regulation decided not to conduct further review of the case of Sinochem Investment’s acquisition of Luxi Group’s equity, which involved anti-monopoly review of concentration of undertakings Other matters shall be handled in accordance with relevant laws.
Regarding the Korean antitrust review involved in this transfer, Sinochem Liaocheng recently received an approval from the Korean Fair Trade Commission. The Korean Fair Trade Commission determined that Sinochem Liaocheng acquired Lu The West Group Equity Case does not violate the provisions of Article 7, Paragraph 1, of South Korea’s “Law on Monopoly Regulation and Fair Trade”.
This transfer still needs to be approved by the State-owned Assets Supervision and Administration Commission of the State Council, and must pass the anti-monopoly approval procedures required by other applicable overseas jurisdictions. Whether relevant approvals can be obtained and whether the transfer can be implemented smoothly There is still uncertainty. The company will perform relevant procedures for exemption from tender offer in accordance with relevant regulations.
This time, passing South Korea’s antitrust review has greatly increased the success of mergers and acquisitions.
The following is a review of the process of changing the actual controller of Luxi Chemical Industry:
1. On October 29, 2019, chat The City State-owned Assets Supervision and Administration Commission and Sinochem Investment signed a “Strategic Cooperation Agreement”. Liaocheng State-owned Assets Supervision and Administration Commission agreed in principle to strategically reorganize the Luxi Group and, subject to the premise of complying with national laws, regulations and relevant policies, transfer the Luxi holdings to Sinochem Investment for free. Sinochem Investment became the largest shareholder of Luxi Group and obtained a controlling stake through various methods such as partial equity ownership of Luxi Group;
2. On December 17, 2019, Liaocheng State-owned Assets Supervision and Administration Commission The committee director’s office meeting reviewed and approved the free transfer of 6.01% of the equity held by Luxi Group to Sinochem Liaocheng;
3. On December 19, 2019, Sinochem Group held the 2019 At the 5th general manager office meeting in 2019, it was reviewed and approved that Sinochem Liaocheng acquired 6.01% of the equity of Luxi Group through free transfer;
4. December 19, 2019, Sinochem Group issued the “Reply on the Equity Reorganization Project of Luxi Group Co., Ltd.” (Sinochem Innovation [2019] No. 75) to Sinochem Investment, agreeing to this transfer;
5. On December 19, 2019, Sinochem Investment issued a shareholder decision to Sinochem Liaocheng, agreeing to the transfer
6. On December 20, 2019, Liaocheng The State-owned Assets Supervision and Administration Commission and Sinochem Liaocheng signed the Equity Transfer Agreement.
Before this transfer, the equity structure was as follows:
This time After the transfer, the equity structure is as follows:
“China BASF” is expected to be born
As an important state-owned enterprise supervised by the State-owned Assets Supervision and Administration Commission of the State Council, Sinochem Group has long maintained close cooperation with Shandong Province .
As Shandong Province continues to accelerate the transformation of old and new driving forces, in order to further deepen the strategic cooperation relationship, on November 2, Sinochem Group and the Shandong Provincial People’s Government signed the “Strategic Cooperation Agreement” Agreement”, which regards Shandong Province as an important strategic area and strengthens the development of all-round, multi-level and wide-area cooperation in the fields of energy, high-end chemicals (new materials), modern agriculture (agrichemicals), urban operations, modern financial services, and environmental protection. Practical cooperation.
Luxi Group is a state-owned enterprise in Liaocheng City, Shandong Province. After nearly ten years of continuous structural adjustment and innovation �With the development, it has gradually transformed from a traditional fertilizer company into a first-class new chemical materials company in China.
After the completion of this transfer, Sinochem Investment will control a total of 55.01% of the equity of Luxi Group through shareholding and concerted actions with Huhe Investment, and become the controlling shareholder of Luxi Group , it is reported that the two parties will support Luxi Group in building a world-class new chemical materials industrial park through various methods such as expanding investment and industrial chain collaboration, and promote the upgrading of Luxi Group from domestic first-class to international first-class in the field of new chemical materials. According to public data, Luxi Group’s revenue in 2019 reached 41 billion yuan, and Sinochem Group’s revenue was 586.3 billion yuan, totaling more than 620 billion yuan! Industry insiders commented: “This merger is expected to make Sinochem the ‘Chinese version of BASF’.”</p
