On June 24, Conch Cement announced that the company signed an equity transfer agreement with its controlling shareholder, Anhui Conch Group Co., Ltd. It intends to acquire 100% equity of Anhui Conch Building Material Design and Research Institute Co., Ltd. held by Conch Group for RMB 562 million. Upon completion of the
acquisition, Conch Design Institute will become a direct wholly-owned subsidiary of Conch Cement.
The announcement shows that Conch Design Institute is a national high-tech enterprise with many engineering design and consulting qualifications, such as Grade a qualification in building materials industry, covering cement engineering, non-metallic mines, new building materials, new energy power generation, ecological environmental protection and industrial and civil buildings. It is a comprehensive engineering service provider integrating R & D, design and general contracting. The board of directors of the Company is of the view that:
(1) given that the Company has established a high-quality development route with the core cement business and the coordinated development of diversified industries (including engineering services), the acquisition of Conch Design Institute is an important layout based on the development needs of the engineering services segment, which is conducive to enhancing the market competitiveness of the engineering services segment of the Company. Promote the professional and large-scale development of the engineering service segment;
(2) Conch Design Institute has rich experience in the design of building materials industry, the design of cement clinker production line projects and the development of cement technology. Upon completion of the acquisition, Conch Design Institute will be able to provide in-depth services to the construction of the Group's engineering projects, optimize the supporting capacity of the industrial chain and the efficiency of resource allocation, and reduce the engineering design costs of the Group's projects. At the same time, Conch Design Institute will be able to further enhance its own strength and create greater value for the Company by leveraging on the Group's industrial development advantages and resources at home and abroad;
As Conch Design will become a wholly-owned subsidiary of the Company and cease to be a connected person/party of the Company upon completion of the Acquisition, the Acquisition can reduce future connected transactions between the Group and Conch Design.
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