Luxi Chemical intends to absorb Luxi Group for a transaction consideration of 6.395 billion yuan

Global Coatings Network News: Luxi Chemical (000830) intends to absorb and merge Luxi Group transaction plan announced
.
On the evening of November 23, Luxi Chemical announced that it intends to absorb and merge
Luxi Group by issuing shares to all shareholders of Luxi Group (Sinochem Investment, Sinochem Liaocheng, Caixin Holdings and Aggregate Investment).

After consultation between all parties, the final transaction price of 100% equity of Luxi Group is 6.
395 billion yuan
.
It is worth noting that the issue price of the assets purchased by the shares issued this time is 14.
76 yuan per share
.
In the secondary market, Luxi Chemical recently closed at 12.
79 yuan per share, with a total market value of about 24.
6 billion yuan
.

According to the data, Luxi Group is a state-owned holding company, formerly known as Shandong Liaocheng Luxi Chemical Group Corporation, and its predecessor is Liaocheng Luxi Chemical Fertilizer Plant
, which was built in 1976.
The company initiated the establishment of Luxi Chemical in 1998 and was listed on the Shenzhen Stock Exchange, and joined Sinochem Holdings Co.
, Ltd.
("Sinochem")
in 2020.

Since the listing of Luxi Chemical, the development of the chemical industry of Luxi Group is mainly based on Luxi Chemical, as a shareholding company, the source of profit of Luxi Group is mainly from the investment income
of listed companies.
In 2020, 2021 and January-September 2022, the net profit of Luxi Group after deduction was 206 million yuan, 1.
212 billion yuan and 805 million yuan
, respectively.
As of the end of September 2022, Luxi Group had total assets of 4.
481 billion yuan and net assets of 4.
471 billion yuan
.

After the completion of this transaction, Luxi Chemical will be the surviving party, will inherit and undertake all assets, liabilities, personnel, business, contracts and all other rights and obligations of Luxi Group, Luxi Group will cancel its legal personality, 492 million shares of the company held by Luxi Group will be cancelled, and Sinochem Investment, Sinochem Liaocheng, Caixin Holdings and Aggregate Investment will directly hold the company's shares
obtained by subscription of the underlying assets.

Before this transaction, Sinochem Investment was the controlling shareholder of Luxi Chemical and Sinochem was the actual controller of the listed company, according to the transaction plan, after the change of equity, Sinochem Investment directly held 32.
92% of the shares of Luxi Chemical, and indirectly held 4.
16%
of the shares of Luxi Chemical through Sinochem Liaocheng.
The controlling shareholder and actual controller of Luxi Chemical remain unchanged
.

In addition, on November 23, Luxi Chemical signed the "Performance Commitment Compensation Agreement"
with Sinochem Investment and Sinochem Liaocheng with effective conditions.
Sinochem Investment and Sinochem Liaocheng are the entities
that bear the obligation to compensate.

According to the announcement, Luxi Chemical and its products have a high reputation in the world, but the trademark ownership belongs to Luxi Group, and Luxi Chemical and its subsidiaries use the registered trademark owned by Luxi Group in their production and operation activities free of charge, and there is a separation
of ownership and use rights.
After the completion of this transaction, Luxi Chemical will undertake the trademarks, patents and other intellectual property rights owned by Luxi Group, which is conducive to the unification and integrity of Luxi Chemical's assets and reduces the dependence
of listed companies on Luxi Group.

For the purpose of the transaction, in addition to considering the unity and integrity of Luxi Chemical's assets, the announcement also said that it was to reduce the holding level and improve decision-making efficiency; Further deepen the reform of state-owned enterprises and optimize the structural adjustment of the layout of state-owned assets; and reducing intra-company related party transactions and enhancing the independence of
listed companies.

Among them, Luxi Chemical said that this absorption and merger is an important measure
for Luxi Group and Luxi Chemical to implement the "Guiding Opinions of the CPC Central Committee and the State Council on Deepening the Reform of State-owned Enterprises", further deepen the reform of mixed ownership of listed companies, optimize the structural adjustment of the layout of state-owned assets, and improve the corporate governance structure.
This merger will further improve the allocation and operational efficiency of state-owned capital, enhance the vitality of the state-owned economy, enhance the overall competitiveness of the surviving companies, and realize the preservation and appreciation
of state-owned assets.