SUMEC Automotive Industry Consulting Development Co., Ltd entered into an agreement to acquire 22.01% stake in China Machinery Engineering Corporation (SEHK:1829) from H shareholders for HKD 3.4 billion on January 11, 2021. Under the terms, 908.2 million H shares will be acquired at a price of HKD 3.07 per share. The payment shall be made no later than seven days after the conditions have been fulfilled. The offer price will not be increased, and the offeror does not reserve right to do so. The transaction will be funded from external and intragroup borrowings. Post the completion of the transaction, H Shares will be delisted from the Stock Exchange and China Machinery will be merged into and absorbed by the Offeror.

The transaction is subject to regulatory approval, approval by shareholders of China Machinery Engineering shareholders. The transaction has been approved by the Board of China Machinery Engineering on January 11, 2021. The Board and the sole director of China SUMEC Automotive Industry Consulting Development Co., Ltd are pleased to announce that the proposed resolutions set out in the notice of EGM and the notice of H Shareholders' Class Meeting were voted by way of poll and all of them were duly passed on July 28, 2021. Merger Agreement is subject to the fulfilment of the Pre-Condition which involves obtaining or completion of the relevant filing, registration, or approval in respect of the Merger with or by the competent PRC authorities. An independent committee has been formed by China Machinery Engineering in respect of the transaction. As of February 3, 2021, latest time for the dispatch of the Composite Document has been extended to a date falling within 7 days of the fulfilment of the Pre-Condition or January 20, 2022, whichever is earlier. As of April 1, 2021, the Pre-Condition is yet to be fulfilled. The Merger Agreement is subject to the fulfilment of the Pre-Condition, being the filing, registration or approval, as applicable, with or by (a) the National Development and Reform Commission of the PRC (as applicable), (b) the Ministry of Commerce of the PRC (as applicable) and (c) the State Administration of Foreign Exchange of the PRC or its local authorities (as applicable), and such other applicable governmental approvals in respect of the Merger having been obtained or completed. The Pre-Condition has been fulfilled on June 3, 2021. The long stop date of the transaction is January 13, 2022. China International Capital Corporation Hong Kong Securities Limited acted as financial advisor to SUMEC Automotive in the transaction. Lo, Amy (Partner); Tam, Tommy of Clifford Chance LLP gave advisory services. Christina Lee and Hang Wang of Baker & McKenzie Hong Kong acted as legal advisor to China International Capital Corporation Hong Kong Securities Limited.